(Adds CEO, analyst comments, background, share price moves)
TORONTO, May 2 (Reuters) - News Corp said on Friday it would buy romance novel publisher Harlequin Enterprises Ltd from Canadian newspaper company Torstar Corp for C$455 million ($415 million) in cash in a move to boost its non-English book publishing.
News Corp's HarperCollins publishing unit will be the new home of Harlequin, which puts out books aimed at women with racy titles such as "My Fair Billionaire" and "Expecting the CEO's Child."
Torstar, owner of the Toronto Star, Canada's largest daily newspaper by circulation, said the sale would strengthen its balance sheet and give Harlequin more opportunities to grow. Torstar shares surged 14 percent in early trading on Friday.
"Harlequin is a perfect fit for the new News Corp, vastly expanding our digital platform, extending our reach across borders and languages, and is expected to provide an immediate lift to earnings" said News Corp Chief Executive Officer Robert Thomson.
Wells Fargo analyst Eric Katz noted the deal would boost News Corp's book publishing revenue as a percent of its total revenues to 20 percent from 16 percent, and also increase earnings.
"We like the strategic fit, larger international footprint, and News Corp's move into a business with visibly improving margins," Katz said in a note to clients.
Harlequin, which owns the Mills & Boon British imprint, publishes over 100 novels a month in 34 languages across six continents. It has published more than 6 billion books since it was founded in 1949 and has branched out into e-books, downloadable audio and smartphone apps.
Roughly 40 percent of Harlequin's revenue comes from books published in languages other than English, while 99 percent of HarperCollins books are published in English.
"Harlequin will give HarperCollins an immediate foothold in 11 new countries from which we can expand into dozens of foreign languages," said HarperCollins CEO Brian Murray.
HarperCollins said Harlequin will remain based in Toronto. The romance novel publisher has over 1,000 employees worldwide, with about 350 in Canada.
Harlequin's 2013 revenues totaled C$398 million while earnings before interest, taxes, depreciation and amortization (EBITDA) were C$56 million, accounting for 29 percent and 32 percent of Torstar's overall revenues and EBITDA, respectively.
Torstar, almost one-quarter owned by Prem Watsa's Fairfax Financial Holdings Ltd, said it would use a portion of the proceeds to repay debt and invest the rest.
David Holland, Torstar's CEO, said the company did not run an auction process, but that the transaction came about after HarperCollins approached them late last year.
Holland said the company was unlikely to raise its dividend, but that the cash inflow should allay investor fears about a dividend cut. He said Torstar was focused on eliminating net debt and maintaining a solid balance sheet.
The deal is subject to regulatory approvals and expected to close by the end of the third quarter.
News Corp shares added 0.6 percent to $17.42 in early trading on the Nasdaq on Friday. Torstar's shares rose 84 Canadian cents to C$7.52 on the Toronto Stock Exchange. ($1 = 1.10 Canadian dollars)
(Reporting by Euan Rocha in Toronto and Ashutosh Pandey and Shubhankar Chakravorty in Bangalore; Editing by Don Sebastian and Jeffreys Hodgson and Benkoe)