Springer Science goes to BC Partners

After abandoning an IPO, EQT and GIC have partially exited the German publishing business with a €3.3bn sale to BC Partners.

Springer Science+Business Media, a German publishing company, is changing private equity hands yet again.

EQT Partners and GIC Special Investments, the private equity arm of the Government of Singapore Investment Corporation, have sold their majority stake in the company to BC Partners for roughly €3.3 billion, according to a statement that noted EQT and GIC would remain minority shareholders. 

Last week, EQT  said it would focus on floating the business but BC Partners put in a revised offer, “which reflects a highly attractive valuation”, Marcus Brennecke, an EQT partner, said in the statement. “The deal allows EQT V to further participate in the future development of the company,” he added. 

GIC and EQT bought the company in 2010 from Cinven and Candover for €2.3 billion, with EQT investing from its EQT V, a €4.25 billion 2006 vintage. Springer Science+Business Media was created by the two buyout firms through a €600 million acquisition of Kluwer Academic Publishers from Wolters Kluwer in January 2003, and the €1,050 million acquisition of BertelsmannSpringer from Bertelsmann in September 2003.

Since 2010, EQT and GIC have invested an additional €304 million in Springer. Under their ownership, the business has improved its sales by 6.4 percent per year to €981 million, while its EBITDA has risen by 12.6 percent per annum to €341 million in 2012, the firms said. 

Springer sells academic content, including journals, databases and books to academic research libraries and corporate customers. It employs more than 7,000 people. Under EQT’s and GIC’s ownership, Springer has expanded its online activities. The digitalisation move has “significantly reduced costs and created new growth potential”, according to EQT’s statement. 

It is understood BC Partners invested in Springer using its BC European Capital IX, which closed on its €6.5 billion hard-cap in February 2012. It’s the firm’s second acquisition this year. In May it acquired Allflex, an animal tag business from Electra Partners, in a deal that valued the business at $1.3 billion. 

BC Partners plans to support the continued growth of Springer globally by further expanding its core subscription business, it said. It will also focus on open access publishing and emerging markets. 

The company which operates in a “growing sector” has “excellent future prospects”, Ewald Walgenbach, managing partner at BC Partners, said in a separate statement. “Its international footprint offers attractive opportunities and it is positioned to benefit from the growth of the knowledge economy worldwide,” he said. 

BC Partners declined to comment beyond the statement, while EQT did not respond to a request for comment at press time. 

BC Partners was advised by Credit Suisse, Nomura and Jefferies. It received legal advice from Freshfields Bruckhaus Deringer. The deal is expected to be completed in August.