Iconic publisher Malkiat Singh is set to earn royalties of 12 per cent from his works that have been acquired by Longhorn Publishers.
The Nairobi bourse-listed publisher Wednesday said it has concluded the deal that will see Mr Singh receive Sh83 million in cash and royalties from the sale of his books—which are expected to generate about Sh200 million annually or more than 20 per cent of its year sales.
This will earn Mr Singh, 75, about Sh24 million annually in the short-term and will see Longhorn add 43 titles to its stable.
Mr Singh has over the past 30 years evolved into a recognised brand in Kenya’s textbook publishing with revisions being his strength besides the more than 20 titles approved by the State under the Free Primary Education textbook (FPE) project.
The buyout does not include the purchase of Mr Singh’s publishing house, Dhillon Publishers and restrict him from publishing with Longhorn rivals over the next decade.\
“We will be offering Mr Singh a royalty rate of 12 per cent on net sales which is slightly higher than the average of 10 per cent,” said Longhorn managing director Musyoki Muli.
“The publisher was experiencing some challenges in marketing the brand; challenges which we hope to overcome through the rebranding that we have just carried out and backed with vigorous marketing.”
The revamped Malkiat Singh series will be sold in regional markets of Uganda, Tanzania, Rwanda, Malawi, South Sudan, Tanzania and Ghana.
Longhorn posted a profit of Sh93.9 million in the year ended June compared to a loss of Sh22.5 million in the same period last year when sales dipped 30 per cent to Sh775.9 million. The sales for the year to June stood at Sh1.03 billion.
The buyout of Malkiat Singh marks Longhorn’s third acquisition of a rival publisher in recent years.
In 2007, it bought out Sasa Sema Publications for Sh22 million, acquiring 28 titles made up of Swahili comic books and junior biographies of African historical figures.
It currently has 66 English and Kiswahili titles under the Sasa Sema imprint which specialises in non-text book materials such as dictionaries, kamusi, novels, plays, biographies and general knowledge books.
In January 2012, Longhorn completed a Sh12.5 million takeover of Dar es Salaam-based Delah Publishers to grow its revenues in Tanzania where it has a market share of 10 per cent.
“Mergers and acquisitions is one of the main strategies but we currently do not have any firm in our sight. We want to first consolidate our enhanced business before making the decision to acquire any other firm,” said Mr Muli.
Longhorn, Kenya’s first listed book publisher, began trading on the Alternative Investment Market Segment last May at Sh14.
The share has lost 16.7 per cent over the past six months to the current price of Sh13.7. Mr Singh said his advanced age and marketing challenges pushed him to sell his works to Longhorn.
“While my products have all through been in great demand, the scope of their marketing has been limited,” said Mr Singh, adding that the Longhorn deal will make his works more accessible.
“I hope to see these series leave a lasting legacy. For this to happen, I have found a new home for these titles (Longhorn).”