BC Partners Draws Neuberger to Springer Nature After Shelved IPO
(Bloomberg) -- BC Partners is finalizing plans to introduce new investors to Springer Nature after scrapping a proposed initial public offering of the academic publisher, people with knowledge of the matter said.
The buyout firm is preparing to sell Springer Nature to a special-purpose fund with new backers led by Neuberger Berman Group LLC, according to the people. The deal, which allows BC Partners to return money to investors in its ninth flagship fund, could be announced in the next few weeks, they said, asking not to be identified because the information is private.
BC Partners will keep a minority stake in Springer Nature, which is set to be valued at about $7 billion in the transaction, the people said. It plans to continue expanding the publisher through acquisitions and operational changes before seeking a final exit in three to five years, according to the people.
The company owns a portfolio of scientific research publications, including the influential “Nature” journal, as well as “Scientific American” magazine. The deal lets BC Partners keep the business longer after the onset of the Covid-19 pandemic scuppered a listing. In March last year, the buyout firm was just days from publicly announcing its intention to pursue an IPO of Springer Nature when it decided to hold off due to market turmoil, the people said.
The firm eventually turned to the booming secondaries market, tapping an abundant pool of liquidity that allows private equity houses to continue managing vintage investments for longer. This once obscure corner of the industry has attracted Wall Street’s attention, with the likes of Goldman Sachs Group Inc. plowing money into the area.
Buyout firms are becoming more inventive as business models that usually cap a fund’s lifespan at a decade prove too rigid for Covid-stricken markets. As well as offering an alternative exit route for investors wanting to cash in their holdings, these so-called general partner-led secondary deals allow firms to keep top-performing assets and juice even more returns from them.
BC Partners has already exited most of the other investments from its ninth fund, which it raised in 2011. It owns Springer Nature together with Germany’s family-controlled Holtzbrinck Publishing Group.
The company was created in 2015 through the merger of BC Partners-owned Springer Science+Business Media with a Holtzbrinck business called Macmillan Science Education. Springer Nature generated around 620 million euros ($728 million) of earnings before interest, taxes, depreciation and amortization in 2019, the people said.
The value of secondaries transactions more than tripled over six years to hit a record $88 billion in 2019 and totaled $60 billion last year, according to advisory firm Greenhill & Co. Ares Management Corp. said Wednesday it would expand in the sector by acquiring secondaries fund manager Landmark Partners in a $1.1 billion deal. The same day, BlackRock Inc. announced it had raised more than $3 billion for its debut secondaries strategy.
Evercore Inc. is advising BC Partners on the Springer Nature deal, the people said. Bloomberg News first reported in October last year that BC Partners had been considering setting up a new special-purpose fund to hold its Springer Nature investment for longer.
Representatives for BC Partners, Evercore and Neuberger Berman declined to comment. Spokespeople for Holtzbrinck and Springer Nature didn’t immediately respond to requests for comment.
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