BertelsmannSpringer goes to Cinven, Candover

The two UK-based private equity groups have agreed to purchase the science and trade publishing unit of German publisher Bertelsmann for E1.05bn.

Cinven and Candover have beaten off competition from two rival private equity consortia to acquire publishing unit BertelsmannSpringer in a deal valuing the business at E1.05bn.


Bertelsmann, which has been in talks with private equity groups from the US and Europe since the end of 2002, selected the joint offer from the two UK firms ahead of a club comprising CVC Capital Partners and US investor The Blackstone Group as well as UK-based academic publisher Taylor & Francis Group, which teamed up with Apax Partners.


In total, Bertelsmann received seven firm offers for the subsidiary. Earlier in the sales process, Soros Private Equity, BC Partners, EQT Partners and Permira all had offers rejected by the family-run group.


“BertelsmannSpringer has been a highly sought after asset,” said Simon Leefe, a director at Candover. “It is a very attractive international business, with a strong reputation in European publishing.”


Cinven and Candover will invest from the E4.4bn third Cinven fund and the E2.7bn Candover 2001 Fund respectively, for equal equity stakes in the business.


Senior, mezzanine and working capital facilities have been arranged and underwritten by Barclays Capital.


Candover and Cinven intend to merge BertelsmannSpringer with Kluwer Academic Publishers (KAP) to create the second largest scientific, technical and medical publisher in the world, with total combined revenues of about E880m and EBITDA of E155m in the period ended 31 December 2002. The newly merged entity will be re-named Springer.


Brian Linden, director of Cinven, said: “The acquisition in January 2003 of Kluwer Academic Publishers gave us an initial position in the sector. Our intention at that time was to build a group with a strong global presence in the STM publishing sector and the acquisition of BertelsmannSpringer is the manifestation of this strategy.”


Candover and Cinven were advised by Goldman Sachs and UBS Warburg.