* Dual track approach helped push up offer price
* Largest German private equity deal since 2006
* Seller says deal set to close in August
FRANKFURT, June 19 (Reuters) - Buyout firm BC Partners agreed to buy German publisher Springer Science+Business Media for about 3.3 billion euros ($4.4 billion) on Wednesday, the largest private-equity acquisition in Germany for seven years.
Owners EQT and Government of Singapore Investment Corporation had been pursuing both a direct sale and a flotation, which appears to have paid off by pushing up the offer price.
Sources told Reuters earlier this week that the owners entered fresh talks with BC Partners after last week rejecting the firm’s 3.1 billion euro ($4.1 billion) bid as too low and announcing they would float the business. .
Springer, which competes with Anglo-Dutch publisher Reed Elsevier and Dutch company Wolters Kluwer, publishes 2,200 English-language journals and more than 8,000 new book titles every year.
“BC Partners plans to support the continued growth of Springer globally by further expanding its core subscription business as well as focusing on traditionally high-growth areas such as open access publishing and emerging markets,” the buyout firm said.
Sources said the sellers would keep a stake of about 10 percent in Springer between them. BC Partners confirmed the current owners would retain a minority shareholding.
BC Partners said some of the 3.3 billion euro deal value, which includes debt, depends on the publisher’s future performance. That amount is 200-300 million euros according to two people familiar with the deal.
Swedish private equity firm EQT said in a statement that the transaction was expected to close in August.
The deal is the largest takeover of a German company by a private equity group since the 4 billion euro acquisition of forklift truck maker Kion by KKR and Goldman Sachs in 2006.
British private equity investors Candover and Cinven created Springer Science in 2004 by merging Dutch group Kluwer Academic Publishers with German firm BertelsmannSpringer.
In December 2009, EQT and GIC bought 82 percent and 18 percent of the company, respectively, from Candover and Cinven.
BP Partners said it was advised by Credit Suisse, Nomura and Jefferies.
The purchase will be backed with around 2.5 billion euros of debt provided by Barclays, Credit Suisse, Goldman Sachs, JP Morgan, Nomura and UBS, banking sources said.
The debt will include euro- and dollar denominated leveraged loans that are “covenant lite,” a structure that offers little or no protection for lenders via financial tests.
It will also include subordinated debt, either in the form of a public or private high yield bond, the banking sources said.