The London-based publisher of Nature and Scientific American, Macmillan Science and Education, announced today that it will merge with Berlin-based Springer Science+Business Media, one of the world’s largest science, technology, and medicine publishers. Together, the duo will generate an estimated $1.75 billion in annual sales and employ some 13,000 people.
The German Holtzbrinck Publishing Group, which owns Macmillan Science and Education, will own 53% of the new company. BC Partners, a private equity firm that owns Springer+Business Media, will hold the rest. In 2013, BC Partners bought Springer in a deal worth approximately $3.8 billion.
The move is “aimed at securing the long-term growth of both businesses,” BC Partners said in a statement. Eventually, the firm aims to sell the new publishing giant, perhaps by transforming it into a publicly held company, managing partner Ewald Walgenbach told reporters. "The most likely exit will be an IPO [initial public offering],” he told Reuters. “However, that is still at least 2-3 years away."
The merger may reflect investors’ waning confidence in the growth opportunities available in technical publishing, some outsiders say. "I think more consolidation is inevitable,” says Richard Anderson, associate dean for scholarly resources and collections at the University of Utah in Salt Lake City. Science “publishers are fielding more and more submissions and chasing smaller and smaller budgets while also dealing with an increasingly complex scholarly communication environment. It’s a very tough position to be in.”
Michael Eisen, the co-founder of the nonprofit open access publisher Public Library of Science, thinks the deal might be a tactic to compete with other big guns in publishing. “I figure it's at least in part about trying to keep up with Elsevier,” another journal giant, he says.
The deal will give Springer the majority of the businesses owned by Holtzbrinck. They include Nature and Scientific American, which has more than 6 million readers, and the academic book publisher Palgrave Macmillan, as well as its textbook division Macmillan Education.
Springer’s portfolio will include all of their medical and technical books and journals, including those published by open-access subsidiaries BioMed Central, SpringerOpen, and Springer Open Choice. Other holdings include Adis, a global provider of drug information for health care professionals; Apress, a technical publisher for information technology professionals; and all businesses in Springer’s Professional Publishing division.
The deal excludes certain businesses, including the scientific software firm Digital Science and the education technology company Digital Education.
Springer Science CEO Derk Haank will lead the merged company, which will have a market value of more than $5.8 billion. The deal is expected to completely close in the first half of 2015.
Editor’s note: The author worked at BioMed Central, which is owned by Springer Science+Business Media, from September 2012 until June 2014.