Springer recaps yet again in €1.945bn deal

Dutch academic publisher Springer is back with its third recapitalisation since Candover and Cinven bought out the company in 2003. Barclays is again sole bookrunner on the €1.945bn deal, which is in keeping with Springer’s tradition of bringing ultra-aggressive transactions to market.

Proceeds will enable the sponsors to take out a €300m dividend as well as pre-paying some of the company’s expensive mezzanine debt. Additionally, syndicate members are being asked to agree to an amendment that will see margins on the existing facilities reduced. Banks are offered 20bp upfront for agreeing to the amendment.

When the deal was recapitalised last year, it carried punchy leverage of 7.4x total net debt to Ebitda. The deal got a good response from the market and the company has been trading well so leverage will be unchanged even after the dividend payment and mezzanine paydown.

The deal will see three new tranches added to the company: a €232.8m five-year term loan B at 237.5bp over Euribor, a €100m six-year term loan C at 275bp and a €100m six-year term loan E at 275bp.

After the pricing amendment, Springer’s existing debt will feature a €275.7m four-year term loan A at 200bp, a €272.4m five-year term loan at 237.5bp, a €272.4m six-year term loan C at 275bp, a €281.3m six-year term loan E at 275bp and a €150m four-year revolver at 200bp.

The €260.3m seven-year second-lien tranche will now pay 525bp, while the €278m eight-year mezzanine tranche, which will be partly repaid, now pays 8%.

Barclays said that the pricing reduction was to bring pricing down to market norms.

But while pricing has definitely been falling in the European leveraged loan market, this transaction is clearly at the more aggressive end.

Candover and Cinven bought the company out in 2003 and have recapitalised the loan every year since.