Candover, Cinven share €100m sale proceeds

Nordic private equity firm EQT and GIC, the private equity arm of the Singapore government, have joined forces to acquire Springer Science+Business Media, a publisher of academic and business products.

The deal – expected to close by early February – values Springer at €2.3 billion, according to a source close to the process, who confirmed that the two private equity sellers will collect around €50 million each for their equity stakes in the business.

Candover Investments, the publicly traded company that both owns Candover Partners and historically invested in its funds, will receive a boost of £11.4 million (€12.6 million; $18.6 million) in proceeds from the sale. The exit will further help to stabilise the company, after what has been the toughest year in its 29-year history.

Earlier in the year Candover Investments found itself unable to honour a €1 billion commitment to Candover’s 2008 fund. Last week LPs in that fund backed a move to terminate it, raising a question mark over Candover Partners’ future.

The latest exit provides the listed parent with a boost, but does not “radically alter” its long-term prospects, said one source close to the situation. This is because, while “every realisation helps” the firm’s financial situation had already been stabilised by the £550 million sale of oil services company Wood Mackenzie in June.

Iain Scouller, a partner at Oriel Securities, described the sale as “useful” for Candover as it would allow the company to reduce net debt further from the £19 million reported in June and trigger a carried interest payment.

Including proceeds from earlier refinancing, the Springer investment will have generated a multiple of 1.7 times capital invested for Cinven and Candover and an IRR of 28 percent, the firms said.

The business was created by Candover and Cinven through €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.

When the sale process for Springer was initiated in January this year, the two financial sponsors were looking to shop a minority stake of 49 percent – rather than the full sale as agreed this week. Various suitors had been linked with the acquisition, such as trade rival Informa and private equity firms CVC Capital Partners and The Blackstone Group.

This is the first time that EQT has co-invested with GIC, which is a significant LP in its funds.

The Nordic firm is currently in talks to buy German drug-maker Ratiopharm. It is the last remaining private equity bidder in the process and is collaborating with Icelandic pharmaceutical group Actavis, a source close to the situation confirmed.