Author Solutions bought by Penguin Group for $116M

Penguin Group, one of the world’s largest trade book publishers, finalized a deal Thursday to purchase Bloomington-based self-publishing company Author Solutions, Inc., for $116 million.

Penguin’s London-based parent company, Pearson PLC, acquired Author Solutions from Bertram Capital management LLC. Author Solutions will operate as a separate entity under Penguin, according to a press release.

Formed in 2007, Author Solutions has since become the world’s leading provider of professional self-publishing services, enabling more than 150,000 authors to publish, market and distribute more than 190,000 books in print and electronic formats.

“For some time we have been saying there is an indie revolution going on here in Bloomington, Ind.,” said Keith Ogorek, senior vice president of global marketing at Author Solutions.

“The first indie revolution was in film, then we saw one in music and for some time it’s been happening in publishing. Because of that, we’ve suggested it is the best time in history to be an author because authors have never had more opportunities to get their books in the hands of readers.”

As e-books and tablet devices rise in popularity, the business model for traditional publishers is threatened.

But Penguin Chief Executive John Makinson said in the release that, during the past three years, self-publishing has transitioned into the mainstream. Self-publishing is currently the fastest growing segment of the publishing industry.

“It has provided new outlets for professional writers, a huge increase in the range of books available to readers and an exciting source of content for publishers such as Penguin,” Makinson said.

“This acquisition will allow Penguin to participate fully in perhaps the fastest-growing area of the publishing economy and gain skills in customer acquisition and data analytics that will be vital for our future.”

According to Bowker, 211,000 titles were self-published in 2011 in either print or digital form, a 60 percent increase from 2010.

The self-publishing industry has also become a source of talent and content for the publishing industry, producing an array of bestselling authors including Lisa Genova, John Locke, Amanda Hocking and E.L. James.

“We’ve seen a trend of self-publishing authors being picked up by traditional publishers,” Ogorek said. “With Penguin’s acquisition of Author Solutions, they’ll be able to have visibility into self-published titles a little bit earlier into their process.”

Author Solutions generated revenues of approximately $100 million in 2011, growing at an average annual rate of 12 percent throughout the past three years.

The business is split evenly between publishing, marketing and distribution services, with revenues derived primarily by services to authors.

According to the release, approximately 1,600 employees work for Author Solutions located primarily in Bloomington and Cebu City, the Phillipines.

The number of those employed at the business’s headquarters in Bloomington could grow, Ogorek said.

“The headquarters for Author Solutions is here in Bloomington, and there are no plans to change that,” Ogorek said.

“We have continued to be a significant employer in the Bloomington market, and we would expect our employer base in the U.S. to grow as a result of this. While I can’t make any specific projections about how many jobs we might add, we certainly don’t see any plans to diminish jobs at this point.”

Because Penguin is a global company, Ogorek said he expects the acquisition to expand Author Solutions’ reach.

The company currently serves Australia, New Zealand, Singapore and Spain. But in the future, Ogorek said he hopes it will become available to interested authors in other parts of the world.

The tie with Penguin, Ogorek said, will also allow for larger global distribution.

“I think it is something the Bloomington community can be very proud of,” Ogorek said. “I think the interesting thing is the indie publishing revolution wasn’t led from New York or Los Angeles, but it was led from Bloomington, Ind.”