Paramount and its overall continual growth
Paramount, as many know, has been growing substantially over the past couple of years, and it continues to grow. It seems as if there is no slowing down for this company. Their community base continues to grow exponentially. Therefore, this provides more leeway in what they want or do not want to do. However, they just did something that has given them, what is most likely their largest sum of money yet. It is uncertain what they are going to be doing, what the cash they have received. However, they are certainly going to have huge plans for the years ahead.
What has Paramount done?
Paramount has just sold an incredibly valuable asset of their company to KKR. “Paramount has agreed to sell Simon & Schuster to private equity firm KKR for $1.6 billion in cash, after more than three years of trying to offload the book publishing powerhouse,” according to CNN Business. This deal has been confirmed after three long years of aiming for completion. There are several reasons why they struck this deal, as it will certainly help Paramount continue in maintaining fair financial etiquette, as well as providing more benefits for their community.
KKR has been planning to buy Simon and Schuster for a while now
KKR has been making several transactions over the past years to ensure they had enough funds to purchase Simon and Schuster from Paramount. In fact, a couple of days before the announcement, they sold one of their very valuable assets. “In August, shortly before the Simon & Schuster deal was unveiled, KKR sold an audiobook publisher RBmedia, which touts 66,000 catalog titles, to an affiliate of private equity firm H.I.G. Capital,” according to The Hollywood Reporter. Therefore, this was certainly being foreshadowed, and clearly, they had put a lot of thought into this process.
What exactly is Paramount planning on doing with the money?
There are several things that the CEO of Paramount has in mind. Although he did not go into many specifics, he did give an outlook on what he had planned. “The proceeds will give Paramount additional financial flexibility and greater ability to create long-term value for shareholders, while also delivering our balance sheet,” Bob Bakish, president and CEO of Paramount Global, said in a statement, according to CNN Business. Clearly, he has a vision for Paramount, which can be said to partly influence him in this decision.
what is the fate of Simon and Schuster after this change?
Since Paramount had owned Simon and Schuster for a very long time, it is said that Simon and Schuster may very well become an independent company. “Simon & Schuster is slated to become a standalone private company and will continue to be led by Jonathan Karp, President and CEO, and Dennis Eulau, COO and CFO of Simon & Schuster,” according to Variety. Therefore, this can certainly be very beneficial for the company of Simon and Schuster. They will continue growing and expanding as the years continue.
The Future of These Companies
It is unclear how the future is going to look after these large changes are made and taken into effect. However, it is safe to say that it will certainly be a long process before these changes can begin. However, Paramount has extra funds that are certainly needed to make new changes to their platform.
On the other hand, KKR has Simon and Schuster, a very well-known company that will surely skyrocket given some time. All in all, this purchase may have been incredibly beneficial for both platforms, and only time will tell what the future looks like.
Written by David Loran Jr
Sources:
CNN Business: After trying for three years, Paramount finally unloads Simon & Schuster for $1.6 billion
Variety: Paramount Global, KKR Sign $1.6 Billion Deal for Simon & Schuster
The Hollywood Reporter: Paramount Global, KKR Sign $1.6 Billion Deal for Simon & Schuster
Featured and Top Image Courtesy of Focal Foto’s Flickr Page – Creative Commons License
Inset Image Courtesy of Vicente’s Flickr Page – Creative Commons License
