Candover and Cinven, the private equity (PE) companies that own media group Springer Science and Business Media, Germany, have reportedly put the company up for sale with a price tag of £2 billion. The PE owners are believed to have appointed UBS and Goldman Sachs to sound out potential bidders. According to sources, prospective buyers have until the end of next week to register their interest.
If the sale does take place, it will mark one of the biggest transactions in any sector until now this year. While media reports say Springer could fetch up to £2 billion from financial or trade buyers, the current economic crisis could make it difficult for potential bidders to meet that price.
Media companies, many of which are heavily reliant on advertising, have seen their valuations fall in the wake of a global advertising recession. However, unlike other media groups, Springer has a relatively secure source of revenue. The global publisher brings out more than 6,500 new book titles every year and owns 60 publishing houses in about 20 countries across Europe, Asia and North America. It employs over 5,000 people. Its British operation, based in Surrey, oversees the publication of 20 journals.
Springer was acquired from Bertelsmann in 2003 for €
1.05 billion. It was merged with the academic publisher Kluwer, which had been bought by Cinven and Candover for £600 million a year earlier.
The scientific and academic publishing sector has experienced increasing attempted consolidations in recent years. In October 2006, specialist information provider Informa plc was approached by Springer about a possible takeover. The takeover would have then created a business worth over £4 billion. But negotiations collapsed. A separate bid for Informa also fell through last year. Several attempts to sell publishing assets have failed in recent months. These include Reed Elsevier's planned disposal of its magazines arm, Reed Business Information. The offer was withdrawn in December 2008 after bidders failed to match its asking price.
