DGAP-News: Springer Nature AG & Co. KGaA (bis 13. April 2018: Springer Nature GmbH) / Key word(s): IPO Springer Nature AG & Co. KGaA (bis 13. April 2018: Springer Nature GmbH): Springer Nature is planning an Initial Public Offering 12.04.2018 / 07:58 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE PRESS RELEASE. Springer Nature is planning an Initial Public Offering - Springer Nature: a leading global academic, education and professional publisher operating in more than 120 markets, dedicated to advancing discovery and learning. - Group revenues of EUR1.64 billion in 2017, of which Research accounts for more than 70%. - Current leadership position is based on more than 175 years of research publishing development and innovations. - Significant sector experience of management team, a supervisory board with broad expertise and a committed long-term shareholder, Holtzbrinck Publishing Group. - Intended listing on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. - Targeted primary proceeds of approximately EUR1.2 billion. - Daniel Ropers (CEO): "Springer Nature is a driving force in scientific progress. We have built an impressive platform of truly global scale, which enables researchers all over the world to effectively advance discovery. An IPO will provide us with increased flexibility to enter the next stage in the development of our company and deliver shareholder value." Berlin, 12 April 2018 Springer Nature together with its shareholders, i.e, entities controlled by Holtzbrinck Publishing Group (HPG) and funds advised by BC Partners (BC Partners), intends to list its shares on the regulated market of the Frankfurt Stock Exchange (Prime Standard). The intended initial public offering (IPO) will consist of a capital increase with targeted proceeds of approximately EUR1.2 billion to strengthen Springer Nature's financial profile. Depending on the market environment, the IPO may also include a secondary placement by BC Partners [1]. HPG [2] will not sell any shares in the IPO and is committed to remaining a long-term shareholder. Springer Nature was created in 2015 through the merger of Springer Science+Business Media S.A. (Springer) and the Macmillan Science and Education business (MSE). It is thereby the culmination of more than 175 years' experience of developing the infrastructure, networks, expertise and brands to serve research, education and professional communities. Today, Springer Nature is home to some of the world's most influential research journals. It is the largest English language academic book publisher and a global leader in open access publishing. In 2017, Springer Nature published around 300,000 articles with one million authors across some 2,800 journals and about 13,000 books. While Research is by far Springer Nature's largest reportable segment, Springer Nature also supports students and teachers with high-quality content in the Education segment, publishing books and materials for language learning, curricula and higher education in more than 100 countries. In the Professional segment, Springer Nature focuses on publications for road safety education matters, the medical and health industry and business information. Growing demand for research around the world Globally, research output is growing year-on-year, outpacing GDP [3]. More than 1.5 million journal articles are now being published each year [4], from a community of more than 8 million academics. Springer Nature has built a strong platform of considerable global scale to respond to this growing volume of research output and to enable researchers to effectively advance discovery by making knowledge accessible. Deeply embedded in the research process and adding value through continuous improvement Springer Nature plays a critical role in ensuring quality and efficiency at every stage of the publishing process from gathering research, through submission, peer review and publication, handling around one million submissions a year and working with a network of more than 700,000 peer reviewers. The company deploys technology, data and analytical tools to make content available to researchers and librarians as quickly and easily as possible. Springer Nature records more than two million visits per day to Springer Nature platforms. Author satisfaction with the research production process has stayed consistently high in recent years, reaching a score of about 4.5 out of a maximum 5. "We aim to be the most respected and progressive academic research publisher. It is our mission to support the science and education community to discover, learn and achieve more. We want to make a difference to how research is used, re-used, discovered and shared. We have a track record of constantly improving and innovating in the academic research publishing process. The intended IPO will help us to accelerate our journey going forward," said Daniel Ropers. Resilient long-term growth Springer Nature has experienced growth in existing and emerging markets. In the Research segment, this has been driven by resilience in the core demand for the Springer Nature content portfolio which is typically made available to academic libraries on a subscription basis and to corporate customers and individuals. Further growth comes from new Nature branded content and, building on Nature's brand recognition, from the provision of additional author and researcher services and the continued investment and development in academic books and ebooks. A track record of continuous improvement and process innovation will continue to underpin and facilitate this growth. Springer Nature is by far the largest open access (OA) publisher worldwide with more than 90,000 OA articles published in 2017. OA has been a rapidly evolving trend in academic publishing over recent years, growing at an average growth rate of about 22% between 2012 and 2016 [5], much faster than the traditional subscription model. Under the OA model, users may access academic articles without paying a charge or fee. The cost of publication is met by an article processing charge paid by the author or funding body. Springer Nature has been driving this trend on a global scale and is therefore ideally positioned to continue to lead the way in this dynamic and growing market. Robust financials At a group level, in 2017 Springer Nature had revenues of EUR1.64 billion and an underlying growth rate of 2.5% (on an organic constant currency basis) [6]. The company's adjusted operating income was EUR374 million in 2017, corresponding to an operating margin of 22.9%. A strong free cash flow conversion rate of 62.5% [7] supports a balanced capital allocation allowing for fast deleveraging and funding of new growth initiatives. 71% of revenues came from the Research segment, which makes Springer Nature by its own estimates the most pure-play global academic research publisher. On a comparable basis, in 2017, the Research segment grew at 3.2%, outperforming the academic research market which grew at approximately 2% [8]. The Research division's adjusted operating income was EUR303 million which equates to an operating margin of 26%. This reflects the high level of continued investments into content and related workflows, as well as its leading position in academic books. "As academic spending is relatively unaffected by economic cycles, we are able to combine stable revenue growth with strong margins and expanding cash generation," said Ulrich Vest, CFO of Springer Nature. "This enables us to deliver attractive and resilient returns to shareholders." Springer Nature to list as a KGaA with an experienced management and supervisory board HPG, BC Partners and the management of Springer Nature have jointly decided that considering our heritage and future plans the most suitable governance structure is that of a German partnership limited by shares (AG & Co. KGaA). The KGaA structure provides greater flexibility when raising new capital and underlines HPG's strong commitment as a long-term shareholder. Springer Nature is expected to be converted into an AG & Co. KGaA on 13 April 2018. The future supervisory board of Springer Nature will consist of seven members and will be led by Dr Stefan von Holtzbrinck, CEO of Holtzbrinck Publishing Group. He will be joined by Dr Ewald Walgenbach, Managing Partner at BC Partners, and Jens Schwanewedel, CFO of Holtzbrinck Publishing Group. Besides the shareholder representatives, additional members will be Obi Felten, Director of Moonshots at X (part of Alphabet), Simone Menne, former CFO of Lufthansa and Boehringer Ingelheim, as well as Dr Stefan Oschmann, CEO of Merck, and Dr Bernd Scheifele, CEO of HeidelbergCement. This composition ensures independence as well as stability and continuity based on the ongoing support of HPG as a well-known and visionary long-term investor with a deep understanding of and commitment to the publishing business, including the academic publishing market. "We are privileged to have such a strong supervisory board supporting our future development. We will particularly benefit from the strong commitment of Stefan von Holtzbrinck who has a deep understanding of our business and shares our vision for the company," said Daniel Ropers. The management board of Springer Nature features a complementary skillset with a balance of experience and fresh perspectives. The Board has accumulated over 100 years of industry experience with a deep understanding of the market. "Led by Daniel Ropers, the Springer Nature team brings unrivalled experience in digital thinking, an entrepreneurial spirit and the ambition to further support the needs of the next generation of scientists," said Stefan von Holtzbrinck, CEO of Holtzbrinck Publishing Group. "Holtzbrinck Publishing Group shares the ambitious mission of Springer Nature and is happy to strongly support its management as a long-term shareholder." Springer Nature pursuing listing at Frankfurt Stock Exchange Springer Nature intends to list its shares on the regulated market segment of the Frankfurt Stock Exchange with simultaneous admission to the Prime Standard. The intended IPO enables Springer Nature to improve its financial flexibility and ensures access to financing via the equity capital markets. Following the transaction, the net leverage ratio will fall to 3.5x 2017 adjusted EBITDA. The free float will depend on the number of new shares issued by the company and the potential secondary placement by BC Partners as well as the Greenshoe option for which shares will be made available by BC Partners. Springer Nature comes to the market with an attractive dividend policy. For the financial year ending December 2018, the management targets to pay a dividend of EUR110 million in May 2019. Thereafter, Springer Nature expects to pay out to its shareholders approximately 50% of its annual adjusted net result. J.P. Morgan and Morgan Stanley are acting as Joint Global Coordinators and Joint Bookrunners. BofA Merrill Lynch, BNP Paribas, Credit Suisse, Goldman Sachs International and Société Générale have been mandated as Joint Bookrunners. Lilja & Co. is acting as the independent adviser to the shareholders and Springer Nature. [1] 47% shareholder pre-IPO. [2] 53% shareholder pre-IPO. [3] OECD countries + China; GDP PPP at constant prices; OECD, EIU. [4] InCites Journal Citation Reports Science Edition, 2016. [5] Including pure Gold Open Access and Hybrid Gold articles. [6] Prior to application of IFRS 15. [7] FCF defined as adj. pre-tax unlevered free cash flow calculated as Adj. EBITDA adjusted for non-cash expenses and income, less change in total working capital less capex less investment in content less change in non-current provisions and long-term receivables. [8] Academic Library Spend on Academic and Scientific content including Open Access, constant currency spend; midpoint of OC&C estimates 1.9-2.5%; OC&C, analysis of multiple sources, 2018 Press contact: Joyce Lorigan, EVP Communications London +44 20 7843 3640 [email protected] Kerstin Mork, Corporate Communications Berlin +49 30 827 87 5110 [email protected] Contact (investors): Thomas Geisselhart, EVP Corporate Finance and Investor Relations Berlin +49 30 827 87 5415 [email protected] About Springer Nature Springer Nature is a leading research, educational and professional publisher, providing quality content to our communities through a range of innovative platforms, products and services. Every day, around the globe, our imprints, books, journals and resources reach millions of people - helping researchers, students, teachers and professionals to discover, learn and achieve more. Through our family of brands, we aim to serve and support the research, education and professional communities by putting them at the heart of all we do, delivering the highest possible standards in content and technology, and helping shape the future of publishing for their benefit and for society overall. Visit: www.springernature.com/group and Follow @SpringerNature. These materials are not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States, Australia, Canada or Japan. The shares mentioned herein have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"). The shares may not be offered or sold in the United States, except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of the shares in the United States. This communication is only being distributed to and is only directed at (i) persons who are outside the European Economic Area or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This document is not a prospectus for the purposes of Directive 2003/71/EC, as amended by Directive 2010/73/EU, (the "Prospectus Directive") and as such does not constitute an offer to sell or the solicitation of an offer to purchase shares of Springer Nature GmbH, to be converted into an AG & Co. KGaA (the "Company"). Investors should not subscribe for any shares referred to in this document except on the basis of the information contained in the prospectus relating to the shares. A prospectus will be published and investors will be able to obtain a copy of it from Springer Nature AG & Co. KGaA, Heidelberger Platz 3, 14197 Berlin, Germany, or on the Company's website. In any EEA Member State other than Germany and Luxembourg that has implemented the Prospectus Directive, this communication is only addressed to and is only directed at "qualified investors" in that Member State within the meaning of Article 2(1)(e) of the Prospectus Directive. This communication contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of the Company. Forward-looking statements should not be construed as a promise of future results and developments and involve known and unknown risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions. The Company does not assume any obligations to update any forward-looking statements. Each of the Company and the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise. The Joint Bookrunners, some or all of which are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, are acting exclusively for the Company and no-one else in connection with the planned IPO. They will not regard any other person as their respective clients in relation to the planned IPO and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the planned IPO, the contents of this announcement or any transaction, arrangement or other matter referred to herein. In connection with the planned IPO of the Shares, the Joint Bookrunners and any of their affiliates, may take up a portion of the Shares in the planned IPO as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such Shares and other securities of the Company or related investments in connection with the IPO or otherwise. Accordingly, references in the prospectus, once published, to the Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, the Joint Bookrunners and any of their affiliates acting in such capacity. In addition the Joint Bookrunners and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which the Joint Bookrunners and any of their affiliates may from time to time acquire, hold or dispose of Shares. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. None of the Joint Bookrunners or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. . --------------------------------------------------------------------------- 12.04.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. 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