German $10 bln publisher IPO is buyout exit test
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Yawen Chen
LONDON, Sept 12 (Reuters Breakingviews) -Springer Nature’s fourth attempt at going public will set the bar for buyout barons stuck on the way out. The German academic research publisher on Thursday announced its intention to float in Frankfurt, over a decade after private equity owner BC Partners bought in. The risk is the initial public offering sweeteners prove insufficient to convince cautious investors staring at the precarious German economy.
Springer Nature’s path out of private ownership has been rocky. The company had to scrap its last listing attempt in 2020, which ambitiously sought to raise nearly 1 billion euros ($1.1 billion) during Covid-19. There were also fears that increasingly popular open-access journals would erode revenue from expensive subscriptions. The company eventually had to resort to a private change of hands in 2021 between funds controlled by BC Partners, which holds a 47% stake.
This time around, Springer Nature looks less dog-eared. The open-access model still means it collects fees from universities and research institutes. Adjusted revenue grew 5% last year, and operating profit has inched up by 1 percentage point annually since 2019. As a result, Springer Nature’s much-frowned debt burden has more than halved to 2.7 times EBITDA. Prospective IPO investors will get an annual dividend equaling 50% of adjusted net income on a permanent basis.
As such, there’s a way for the group to be worth 9 billion euros ($10 billion), as bankers hope. In 2023 Springer Nature made around 685 million euros of EBITDA, Breakingviews calculates from conversations with a source familiar with the situation. On a multiple of 16 – the average of rivals Wiley WLY.N, Wolters Kluwer WLSNc.AS, RELX REL.L and Informa INF.L – it would be worth 9.1 billion euros, after stripping out 1.85 billion euros of net debt.
Yet that ignores the need for a discount for factors such as Springer Nature’s relatively higher leverage to its peer group. The research publishing sector is also only expected to grow at a compound annual growth rate of around 3% between 2023 and 2029. And IPO markets are moribund – in the first half they raised their lowest volume since 2016, Dealogic data shows.
Either way buyout shops are sitting on more than $3 trillion of portfolio companies, and have held onto them for an uncomfortably long median of over five years, per research shop Preqin. Springer Nature could raise its chances of success via a smaller fund-raising target of around 500 million euros. If a float can get away at the desired valuation level, it will give some glum private equity types some reason to be cheerful.
Follow @ywchen1 on X
CONTEXT NEWS
Springer Nature said on Sept. 12 it plans to launch an initial public offering (IPO) on the Frankfurt Stock Exchange that could be completed by the end of 2024.
The company said its planned IPO will consist of a 200-million-euro ($220 million) capital increase and a sale of existing shares. It intends to pay a dividend of 25 million euros ($27.5 million) for this year, and thereafter an annual dividend of around 50% of annual adjusted net income.
Holtzbrinck Publishing Group and BC Partners currently own 53% and 47% stakes respectively.
Reuters reported in February an IPO could value the company at up to 9 billion euros including debt.
IPOs have been broadly lagging stock markets https://reut.rs/4gpP3De
Editing by George Hay and Streisand Neto
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
