One could get dizzy trying to trace the M&A history of Springer Science+Business. I recall analyzing their likely future back when they were owned by two private equity companies, Cinven and Candover in the mid-2000s. Cinven & Candover had formed Springer Science + Business by merging Kluwer Academic Publishing with Springer in 2004. In late 2009, Cinven & Candover sold Springer Science + Business to EQT, a Swedish private equity firm, for 2.3 B EUR (note, Springer held 2.2 B EUR of debt at the time).
In 2013, EQT sold Springer to BC Partners for 3.3 B EUR.
Today, it was announced that BC Partners will merge Springer with Holtzbrinck Publishing Group’s Macmillan Science Group (well, almost all of MSG). Holtzbrinck becomes majority investor with a 53% stake; BCP retains minority ownership. Derk Haank, the CEO of Springer, will become CEO of the combined company. Annette Thomas, current CEO of Macmillan, will serve as Chief Scientific Officer.
The combined entity will have 13,000 employees and annual sales of 1.5 B EUR ($1.7 B US).
The rationale for the merger centered on the need for market share in the scholarly publishing segment. Derk Haank is quoted as saying, “Together, we will be able to offer authors and contributors more publishing opportunities and institutional libraries and individual buyers will have more choice. The expected economies of scale will allow for additional investments in new product development.”
Scale and market share are becoming increasingly important as large publishers, including Elsevier, Wolters Kluwer, and Wiley, along with Springer, are competing to acquire titles from scholarly societies and other small publishers. Having control over the high quality scientific and medical journal content allows the big publishers to reinforce the value of bundled access to their collective publications (as well as subsets of their publications). But, perhaps more important, by accumulating rights to a significant share of the journals that serve as the arbiters of quality research— and by association, quality scientific and medical evidence—these leading scientific, technical and medical (STM) publishers will remain essential to any analytics engine that aims to mine the universe of important research results.
In brief, scale affords digital information businesses far more options in their choice of business models than would be available to a small publisher. Springer Science + Business now has Nature and its portfolio of journals in its camp. Together, they should be able to better compete in a segment that will continue to consolidate.