Magazine article Information Today

Kluwer Academic Publishers Sold to Venture Capitalists

Magazine article Information Today

Kluwer Academic Publishers Sold to Venture Capitalists

Article excerpt

Dutch publisher Wolters Kluwer has announced the sale of Kluwer Academic Publishers (KAP) to London-based private equity funds Candover and Cinven for approximately $591 million. Cinven and Candover will each contribute $106 million, and the management team, led by KAP CEO Peter Hendriks, will invest alongside them. As such, says Eric-Joost Ernst, an investment manager at Candover, the purchase could equally be described as an institutional buyout or a management buyout. Announced in October, the transaction is expected to be completed by early 2003.

Headquartered in Dordrecht, Netherlands, KAP is a leading international publisher of information for scientists in academic and corporate research functions. Its product portfolio includes approximately 675 scientific and technical journal titles, such as Catalysis Letters, Journal of Computer-Aided Molecular Design, and Materials Science; approximately 1,200 new book titles a year; and the Kluwer Online electronic platform. The company's turnover for the year to December 31, 2001, was $148 million. Of this, the journals accounted for around 70 percent and book sales 30 percent.

The news was widely anticipated following an announcement earlier this year that Wolters Kluwer was refocusing and would sell off non-core businesses. Commenting on the sale, Rob Pieterse, CEO of Wolters Kluwer, said, "Wolters Kluwer has realized an important strategic step in tuning its portfolio and intends to use the funds to expand further in its core activities: Legal, Tax & Business, Health, and Education."

In the wake of the sale, the Wolters Kluwer Health cluster (formerly the Health & Science cluster) will focus exclusively on the medical sector, specifically English-- reading professionals in the global health market. The product portfolio currently includes Lippincott, Williams & Wilkins; Ovid Technologies (including SilverPlatter); Adis; and the recently acquired Medi-Span.

The news was greeted with speculation that the sale was a response to the threat posed by the increasing number of alternative journals being established by disaffected customers and the trend for researchers to self-archive their papers on the Web. "I'd like to believe that the sale was precipitated by the growing success of open access initiatives," says Peter Suber, author of the Free Online Scholarship Newsletter. He added: "Most scholarly journal publishers have no happy customers [since] they have adopted prices and licensing terms that anger libraries, their primary market. Kluwer was not very friendly to the interests of journal editors and readers."

Wolters Kluwer, however, denies this as a motive, arguing that the sale merely reflects the decision to focus on the company's strengths. "The leading player in science is Reed Elsevier, and they have a substantial lead," commented Wolters Kluwer spokesman Eric Heres. "Although we were an important player, we were not a leading player, and it was clear that to become one we would have had to invest a great deal of money. We decided, therefore, to focus on health-which is one of the most profitable markets in the world and one in which we are already a leading player."

For many, the real surprise was that the business was acquired by venture capitalists, rather than a rival publisher. With both John Wiley and Taylor & Francis rumored to have bid, Suber wonders why a publisher didn't outbid Candover and Cinven. …

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