Macmillan + Springer: Some Lessons to Learn, Some Twists to Watch | The Scholarly Kitchen
"The recent merger news about Macmillan, owners of the Nature Publishing Group (NPG), and Springer, owners of Biomed Central and other properties, hit the market with plenty of force. It’s a major consolidation, and one that ratchets the Macmillan higher education and journals growth strategy up by an order of magnitude. Now, along with Elsevier, Wiley, and Taylor & Francis, we have another multi-billion-dollar publishing behemoth on the market — the combined entity is valued at $5.8 billion. Measuring by percentage of papers in the market, the new entity takes second place with 13%, just ahead of Wiley (12%), and still far behind Elsevier (23%). By number of journals, the race is nearly neck-and-neck. In this marriage, Macmillan will end up 53% of the assets, Springer 47%, assuming the merger is approved. Springer, you may recall, has been bouncing around among investors for a while. It is currently owned by BC Partners, a private equity firm. BC Partners has stated that it sees its most likely exit from the business coming via an IPO at some later date, perhaps 2-5 years in the future (sources vary in their estimates). The merger centers around higher education and science products, and includes Palgrave Macmillan, Scientific American, Macmillan Education Language Learning, Adis Drug Information, Apress, and Springer’s professional publications. An interesting side note is that the CEO of Macmillan, Annette Thomas, will become the new organization’s Chief Scientific Officer. Derk Haank of Springer will be the new CEO of the combined entity; he is bringing his COO and CFO along, which suggests that the new entity will be focused primarily on financial and operational performance, which makes sense if they are grooming it for an IPO. There are specific drivers for why these two companies merged, and David Worlock covers it extremely well in a blog post written shortly after the announcement. In addition, as Worlock writes, there is a satisfying nationalistic angle to the deal between Springer and Macmillan’s parent, Holtzbrinck, a German family-owned company: 'So both can go happily hand in hand to the German regulator , and get a big tick for accomplishing one of the prized national objectives – keeping Springer, the historical home of German chemistry as it reshaped late nineteenth century science, as a German company.' BC Partners is a German investment company, making this an all-German transaction. What’s left out of the deal is almost as interesting as what’s included. For instance, Macmillan’s Digital Science is not part of the deal, as a post from Timo Hannay outlined in anodyne terms. This seems like a financial move by Holtzbrinck. Digital Science is in investment mode, meaning that including the property in the current deal would have decreased cash flows and the deal’s inherent value ..."