Springer IPO

["Janice McCallum" <janicemc@shore.com>]

This is my first posting to liblicense!  Ann O. was very helpful to me
over the holiday break when I asked her if she had heard any news about a
possible IPO for Springer in 2005.  I promised to post information to this
group when I gathered more detail.  So, here it is, the weblog I just
posted on the Shore site that sums up what I've learned, and references an
article in the Sunday Times about the IPO.

Springer IPO in 2005?

There have been rumors stirring for the past month about a possible
Springer IPO in 2005. Yesterday's Sunday Times is the first story I've
seen in the mainstream press that acknowledges the rumors. Considering
that Springer is currently owned by two European private equity firms,
Candover and Cinven, and that annual sales for Springer are somewhere in
the ballpark of $1.1 - $1.2 billion, it is not surprising that the exit
strategy will involve an IPO. There simply aren't many prospective bidders
for a company that size, and the likely prospects would face antitrust
concerns.

What is surprising to some is the talk of an IPO as soon as mid-2005.  
There is some speculation that Springer's top-line and bottom-line results
have been better than expected and are driving the early IPO.  Surely
there have been some efficiency gains as a result of the merger of
Springer and Kluwer Academic Publishing to help the bottom-line. But, it's
hard to believe that sales growth could be so rosy when academic library
budgets are under pressure. Granted, Springer has wisely focused on
digitizing its collection of journals and books as quickly as possible and
sales via the MetaPress platform are apparently quite healthy.
Nonetheless, the primary driver behind the early IPO is more likely the
desire by Candover and Cinven to cash out of their investment in Springer
while they believe they can get their target rate of return and apply the
proceeds to their next big deal.

Note that the Times article mentions the possibility of "bulking it
(Springer) up by bolt-on acquisitions ahead of a float". Candover and
Cinven have other media properties in their portfolios, such as MediMedia,
which could bolster the appeal of Springer in the red-hot medical segment.
Watch this space for developments on the Springer IPO.

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I'd be delighted to hear your feedback on my commentary.

Best regards,
Janice

Janice McCallum
Senior Analyst, Consultant
Shore Communications, Inc.
Braintree, MA  02184
781 356.1766

www.shore.com
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