Two of the UK's largest buyout firms, Candover and Cinven, are participating in the auction for Kluwer Academic Publishing [KAP] that also has trade buyers Taylor & Francis and John Wiley in the bidding.
Media group Wolters Kluwer put its academic publishing business up for sale in order to reduce its debt as well as to help finance investment in its legal, tax and healthcare publishing operations. The group is keen to grow this part of its business, which is the key driver to the company's total revenues of E3,837m in 2001.
The auction, being run by Goldman Sachs, will see the four separate bids being assessed today and analysts are predicting that the business will be valued at around E500m. It is estimated that KAP had revenues of around E165m in 2001.
Both Candover and Cinven have an appetite for media assets – Candover has been active in the sector already having bought and sold Regional Independent Media and Cinven led the private equity-backed acquisition of the healthcare and business publishing activities of Vivendi Universal in April this year in a E1.2bn deal.
Trade publishing has especial appeal as they are typically less exposed to volatility in the advertising market, instead enjoying solid, long-term subscription revenues that mean that the businesses have the kind of robust cash flows that can carry increased leverage.
With other media groups changing their focus and restructuring – Bertelsmann for example is expected to be selling its trade publishing business soon – financial buyers see a consolidation opportunity. Its also the case that both the US publisher John Wiley and its UK competitor Taylor & Francis can see the benefit of acquiring significant critical mass across Europe by buying KAP.
Both Candover and Cinven have also recently closed multi-billion Euro buyout funds.