Pearson acquires Author Solutions for $116 million

Pearson reports that it has acquired self-publishing company Author Solutions, based in Bloomington, IN, for $116 million in cash. Author Solutions was owned by California-based Bertram Capital. Its back office and technology operations will be taken over by Penguin, but the company will be run as an independent business within Penguin.

Author Solutions has published more than 190,000 print and eBooks for 150,000 authors. Its 2011 revenues were approximately $100 million, split across publishing, marketing and distribution services. The company has approximately 1,600 employees, located primarily in Bloomington and Cebu City, in the Philippines, with a small office in Indianapolis. Penguin will expense the costs of integrating Author Solutions in 2012 and expects the acquisition to be accretive to earnings in 2013.

This is obviously a way for Penguin to profit from the growth in self-publishing, as well as an opportunity to use Author Solutions as a "farm club" for identifying new authors for Penguin's imprints.