Bertelspringer changes hands

Brian Linden of Cinven and Simon Leefe of Candover directed their companies to acquire the scientific and academic publisher Bertelspringer from the German entertainment and media group Bertelsmann.

Candover and Cinven also announced their intention to merge the newly acquired company with Kluwer Academic Publishers, bought from the Netherlands-based company Wolters Kluwer in January.

Advised by Goldman Sachs and UBS Warburg, the deal is bound to give heart to a sector battered by the plunging stock market and collapse in the M&A and IPO markets.

Indeed the first quarter of this year is thought to be the first year ever when not a single main market listing has taken place. The City is still demoralised from a battered corporate finance market, which took a further blow recently when Ernst & Young revealed research to show venture capital investment in the UK fell dramatically in the first quarter of this year. UK investment fell from euro 365m (£259m) in the fourth quarter of last year to (TM)191m for the first three months of 2003.

The Cinven and Candover deal demonstrates there are still some deals to be done, some of which are very big. Simon Leefe, who qualified with Arthur Andersen before joining Candover, said: ‘Candover and Cinven have proven track records of investing in the media sector and today’s acquisition is in line with our focus on backing leading European businesses with exciting growth prospects.’

Brian Linden, who was with Deloitte & Touche before Cinven, said the company produced from the merger would receive the finance it needed to go forward.

Cinven has been involved in a number of deals lately including the sale in March of Odeon cinemas to WestLB AG, which it had bought from Rank three years ago.

The E&Y survey will bring deep disappointment in many quarters because of optimism last year that things could be on the turn.

Stuart Wilson, who leads E&Y’s venture capital corporate advisory group in the UK, said: ‘These are very disappointing figures. Deal flow appeared to have stabilised in the second half of last year after a poor run, but it is evident in the last quarter that the VC market was not immune from the impact of world events that other markets also experienced. The global economic uncertainly has had a major impact on investor confidence.’

Private equity investment has been across all sectors throughout Europe.

The worst hit is the biopharmaceutical sector where investment has fallen 54% from euro 321m in the last quarter of 2002 to euro 147m at the end of the first quarter this year.

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