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KKR to Takeover German Publisher Axel Springer in Potential $7.7 Bn Deal?

KKR to Takeover German Publisher Axel Springer in Potential $7.7 Bn Deal?

PerformanceIN

It is believed that US private equity firm KKR is making a move to take over Axel Springer in a potential deal that would value the European publishing company at around $8 billion ($7.7 billion).

According to a report on CNN Business, KKR last Wednesday (June 12) offered investors in Axel Springer €63 ($71.40) per share in a deal that has support from the company's largest shareholder, Friede Springer, and CEO Mathias Döpfner. If the offer stands, it will position the Berlin-based company at the value of €6.8 billion ($7.7 billion). 

The European publishing company has been under intense pressure from investors in recent months with the firm expecting revenue for the current financial year to decline “in the low single-digit percentage range”, as mentioned on CNN Business.

Axel Springer added that tougher economic conditions and the introduction of a digital tax in France has forced them to change its forecast.

"Our journalistic principles and our corporate culture remain the foundation on which we build and in which we trust," said Friede Springer, the widow of founder Axel Springer; "KKR would be a good partner who sees this the same way."

Döpfner, the CEO, said in a statement that going private will allow the publisher to shift its focus away from short-term financial targets as he plans investments in people, products, technology and brands.

Where next for its assets?

Axel Springer currently owns a range of publications, including top German tabloid newspaper Bild and the website Business Insider, the publisher of Insider Inc. As part of this potential move which could see the German publisher giant go private, it is believed that the Business Insider along with the Markets Insider and Insider, will combine with eMarketer in 2020 in a bid to bolster the business-to-business digital research and intelligence services that both companies provide.

Awin’s response to the developments

Axel Springer is also the parent company of global affiliate network Awin, with the question being brought up in a panel discussion at the company’s third annual conference ThinkTank UK on Thursday (June 13th).

In response to the audience question on what this deal could potentially mean for the company, Mark Walters CEO of Awin stated that the news doesn’t mean that KKR will be taking over Axel Springer, but rather an option for the private equity firm to “take a 20% stake” of the Berlin-based publisher.

“You can look at it in a number of different ways. One aspect of Axel Springer, they don’t just own Awin, they also own a number of significant classifieds so they’re huge on a global scale of recruitment,” said Walters.

“Classifieds is a growing segment for them and in the news, Axel Springer are looking to acquire eBay classifieds with the value put aside at 10 billion, that’s going to take some additional equity and one of the reasons why KKR would get involved in such a relationship, but also because Axel Springer are continuing to evolve from being a media company into a more media and tech company. In order to do that, they’re looking into further investment within their portfolio so they can move away from this cycle of, what we would consider, “12 months growth dividends” into longer term growth plans,” he continued.

“That for me is the really exciting part, said Adam Ross, chief operating officer at Awin; “It’s always hard working with a listed company that’s always expecting EBITDA growth year-on-year and it sort of discourages you in making long term investments for growth, so we’re quite excited to see what this could mean for us as they (Axel Springer) have been very open in wanting to change their philosophy and moving into a long-term model which is going to be great for the channel."

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Mustafa Mirreh

Mustafa Mirreh

Mustafa is a senior journalist at PerformanceIN. Reporting on the latest day-to-day news and updates from the world of performance marketing, while also doing social media promotion, live reporting of events, article features and interviewing key industry players.

 

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