Tuesday, February 27, 2018

SpringerNature Readying €7Billion IPO

German publisher SpringerNature indicated they plan an initial public offering later in 2018 but according to Reuters the company is planning to bring this market offer forward in the year.   The Reuters report has the company announcing the IPO in May with a listing about a month later.  The company fears that market volatility will compromise the offering and to mitigate this they are shortening the timing between the announcement and sale.

SpringNature is a joint venture between German publisher Holtzbrinck and BC partners which were the primary owners of Springer+Business.  The JV was created in 2015.

Somewhat predictably, Reuters speculates that Holtzbrinck may increase their ownership of the group by buying some of the shares on offer.  They currently retain 57% of the joint venture and according to Reuters sources would like to keep ownership post-IPO to more than 40%.

From the report:
While BC Partners will sell some shares in the IPO, Holtzbrinck may even buy some and is aiming to keep a stake of more than 40 percent in the company. The targeted free float is at least 20 percent.  The bulk of the proceeds would be used to cut net debt, which currently stands at roughly 3 billion euros, with a view to bringing indebtedness down to 3.75 times earnings before interest, tax, depreciation and amortization (EBITDA) after the IPO, the source said.  Peer RELX trades at about 11 times its expected core earnings.
SpringerNature posted 1.62 billion euros in sales in 2016 and employs 13,000 staff. It publishes roughly 3,000 scientific magazines as well as 12,000 new books every year. Last year, its earnings before interest, tax, depreciation and amortization stood at roughly 600 million euros.

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