Bridgewater Capital (BC) paid €774m (£524m) for Wolters Kluwer Education (WKE) - a multiple of 2.44 based on WKE’s 2006 turnover of €317m (£215m). BC’s advisors on the deal were Clifford Chance, Deloitte and Greenhill.
The deal is the first of the large sales of educational publishing assets. At about £25m ahead of expectations, does this mean that Harcourt and Thomson will also go at higher prices? Possibly not as they are both very US focused and the most obvious exist for any VC buyer, would be a corporate break-up, rather than a trade sale. BC, on the other hand, has acquired a very different business, one that:
- Is of a more manageable size to integrate with another publisher
- Has a strong European focus but with good reach into Africa, Australia, India, Asia and the Middle East through their established network of offices and agents
- Has a strong Dutch online testing and assessment business
- Has a strong links to AQA, the largest exam board
- Does not appear to have any major regulatory or competition issues in its major markets.
BE is a well established VC player. In the UK they own education recruitment company Protocol as well as John Brown Citrus, a contract publishing company with several education clients. In the UK,
WKE’s best-known brand is Nelson Thornes, who have a publishing deal with exam board AQA. In their press release, Mike Black of BC said, ‘WKE is an extremely attractive business. We believe it has significant potential to develop further by accelerating its expansion plans and through potential market consolidation opportunities’. The last bit is interesting as this seems to confirm our prediction of a consolidation in the sector, with Espresso’s purchase of C4 Learning being the most recent example.
While Dame Marjorie Scardino acknowledged WKE was attractive to Pearson, she obviously didn’t think it was worth a multiple of 2.44, yet.
