Apax Partners

Apax Partners LLP is a British private equity firm, headquartered in London, England.[3] The company also operates out of six other offices in New York, Hong Kong, Mumbai, Tel Aviv, Munich and Shanghai.[4] As of December 2017, the firm, including its various predecessors, have raised approximately $51 billion (USD) since 1981.[2] Apax Partners is one of the oldest and largest private equity firms operating on an international basis, ranked the fourteenth largest private equity firm globally.[5]

Apax Partners LLP
TypePrivate (LLP)
IndustryPrivate equity
Venture capital
Founded1969 (1969)
HeadquartersLondon, England
Key people
Andrew Sillitoe (co-CEO)
Mitch Truwit (co-CEO)[1]
ProductsInvestments
Private equity funds
Leveraged buyouts
Growth capital
Total assets$51 billion[2]
Number of employees
100+
Websitewww.apax.com

Apax invests exclusively in certain business sectors including: telecommunications, technology, retail and consumer products, healthcare and financial and business services. Looks for a target EBITDA of $1,000mm - $5,000mm.

Apax raises capital for its investment funds through institutional investors including corporate and public pension funds, university and college endowments, foundations and fund of funds. One of the firm's co-founders, Alan Patricof, was an early investor in Apple Computer and America Online (AOL).

History
History of private equity
and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)

Apax Partners Worldwide is the product of the combination of three firms:

  • Patricof & Co., founded in 1969 in New York by pioneering venture capitalist Alan Patricof;
  • Multinational Management Group (MMG), founded in 1972 by Sir Ronald Cohen and Maurice Tchénio;[6]
  • Saunders Karp & Megrue, founded in 1988 by Thomas A. Saunders III and Allan W. Karp and joined by John Megrue in 1992.

Patricof & Co. and MMG

In 1969, Alan Patricof founded Patricof & Co. a firm dedicated to making investments in "development capital" later known as "venture capital," primarily in small early-stage companies. Patricof, one of the early venture capitalists, was involved in the development of numerous major companies including America Online, Office Depot, Cadence Design Systems, Apple Computer and FORE Systems.[7] In 1975, Patricof launched 53rd Street Ventures, a $10 million vehicle.

Meanwhile, in 1972, Sir Ronald Cohen and Maurice Tchénio, along with two other partners, founded Multinational Management Group (MMG) with offices in London, Paris, and Chicago. MMG initially was established as an advisory firm, working with small emerging companies, rather than an investment firm. However, MMG initially struggled to gain traction amid the negative economic conditions, particularly in the UK in the mid-1970s.

By 1977, two of the original four founding partners had left MMG, leaving Cohen and Tchénio in need of a partner to help rejuvenate their firm. In that year, Cohen approached Alan Patricof to join them and run the new firm's investments in the U.S. The new firm would be known as Alan Patricof Associates (APA) and ultimately come to be known as Apax Partners (based on a play on Patricof's name: Alan Patricof Associates Cross (x) Border). Following the merger, MMG abandoned its advising business, and the new APA shifted its focus exclusively to investing in start-up companies.

1980s-21st century

Throughout the 1980s, the firm grew steadily raising capital under a series of separate funds. As the 1980s progressed, the firm introduced its first later stage venture fund in 1984, its first growth capital fund in 1987 and its first dedicated European leveraged buyout fund MMG Patricof European Buy-In Fund in 1989.[8] In response to the changing conditions, in the venture capital industry in the 1980s Apax (and other early venture capital firms including Warburg Pincus and J.H. Whitney & Company) began to transition away from venture capital toward leveraged buyouts and growth capital investments, which were in vogue in that decade.[9][10] This trend was more prevalent in Europe than the U.S. where Patricof preferred to continue focusing on venture investments.

In 1991, Apax Partners became the official name for all of its European operations however the U.S. business still operated under the Patricof & Co. name. By the mid-1990s Apax had become one of the larger private equity firms globally.

In 2000, Patricof & Co. adopted the Apax Partners branding and formalized its affiliation with its European business. The U.S. business would operate as Apax Partners, Inc.[6] The following year, Patricof stepped back from day-to-day management of Apax Partners, Inc., the US arm of the firm to return to his original focus on making venture capital investments in small early-stage companies. In 2006, Patricof left Apax to form Greycroft Partners which focuses on small early-stage venture capital investments.[11]

Despite the closer relations between the U.S. and European teams, the firm still operated separate fund entities for each geography. The European side of the business began to pull away in terms of capital commitments, raising more than $5 billion for its 2004 vintage European fund but just $1 billion for its 2006 U.S. vintage fund.[8]

Saunders Karp & Megrue

In 2005, Apax announced it would acquire middle market leveraged buyout firm Saunders Karp & Megrue to augment its buyout business in the United States. Saunders Karp, formerly based in Stamford, Connecticut, was founded in 1989 by Thomas A. Saunders III and Allan W. Karp. John Megrue, who today serves as co-chairman of Bridgewater Associates, had worked as a principal at Patricof & Co. before joining Saunders Karp in 1992.[12] Saunders Karp had received capital commitments from institutional investors including AT&T Corporation, the General Electric Pension Trust, Goldman Sachs Private Equity Group, HarbourVest Partners, JP Morgan Fleming Asset Management, New York State Common Retirement Fund and Verizon, among others.[13]

Investments
Pre-2000
  • In 1998, Apax invested in Neurodynamics Limited, which was the parent of Autonomy Corporation.
  • British Telecom restructured, and agreed to sell the Yell Group Yellow pages directory business to Apax and Lion Capital LLP for £2.14 billion/$3.5 billion,[14] making it then the largest non-corporate LBO in European history. Yell bought US directories publisher McLeodUSA for about $600 million the following year,[15] and floated on London's FTSE in 2003.[16]
2004
2005
  • Apax purchased a majority stake in Travelex (the world's largest foreign exchange company) for £1.06bn. In Q3 2005 Apax also announced plans to purchase Grupo Panrico, one of Spain's largest food companies and its largest bakery company.
  • A partnership consisting of Apax, Saban Capital Group and Arkin Communications acquired the controlling interest (30%) in Israeli telecommunications company Bezeq in October 2005 for $923 million.[17] The partnership sold its stake to Internet Gold – Golden Lines Ltd. subsidiary B Communications in April 2010 for $1.75 billion.[18]
  • As part of the Violet Acquisitions consortium (along with Barclays Capital and Robert Tchenguiz) Apax is involved in the December 2005 purchase of Somerfield. Somerfield was later sold to The Co-operative Group in March 2009.
  • Apax floated the satellite communications company Inmarsat on the London Stock Exchange in 2015.[19]
2006
  • Apax purchased the Tommy Hilfiger Corporation for $1.6 billion, or $16.80 a share, all in cash. In May 2006, this deal was approved by the shareholders of Tommy Hilfiger.
  • In June 2006, Apax acquired HIT Entertainment in a take-private transaction.[20]
  • Apax acquired a majority stake in Pictage, Inc. the leading provider of online solutions for professional wedding and portrait photographers. Pictage, Inc. was co-founded by Gary Fong.
  • On 21 August 2006 it was announced that Apax Partners and Bain Capital had joined the enlarged private equity consortium headed by KKR that has agreed to acquire an 80.1% stake in the Semiconductor Division of Royal Philips Electronics. The new company is called NXP Semiconductors.
  • On 31 October 2006 it was announced that Apax Partners had acquired FTMSC (France Télécom Mobile Satellite Communications) which would later be rebranded under the Vizada name in June 2007. This was shortly followed by an announcement on 6 September 2007 explaining that Apax Partners had acquired Telenor Satellite Services which was to be merged into the Vizada brand.
  • On 20 November 2006 Apax Partners Worldwide LLP won a tender to buy control of Tnuva. The bid values the privately held food and dairy group at $1.025 billion.
2007
  • In May 2007, Apax signed definitive agreements with funds advised by Apax Partners and OMERS Capital Partners under which such funds acquired the higher education, careers and library reference assets of Thomson Learning, and a consortium of funds advised by OMERS, and Apax acquired Nelson Canada, for a combined total value of approximately $7.75 billion in cash. The higher education, careers and library reference assets include such well-known brands and businesses as: Wadsworth, South-Western, Delmar Learning, Eddie Diamond, Gale, Heinle, Brooks/Cole, Course Technology and Nelson Canada. Nelson Canada is a leading provider of books and online resources for the educational market in Canada. The group will be majority-owned by OMERS. The name was changed to Cengage Learning, on 24 July 2007.
  • Apax sells PCM Uitgevers.
2008
  • In January 2008 Apax and Mivtach Shamir purchased the Tnuva company for $1.025 billion.[21][22]
  • In August 2008, Apax Partners completed acquisition of TriZetto Group.[23]
2009
  • In August 2009, Apax Partners completed acquisition of Bankrate.[24]
2010
  • In January 2010, Apax Partners acquired 76.8% of Israel-based Psagot Investment House for $570 million.[25]
  • In April 2010, Apax Partners announced acquisition of TIVIT.[26][27]
  • In May 2010, Apax Partners acquired a 70% stake in Sophos for $580 million.[28]
2011
  • On 25 March 2011 Apax Partners announced that it had reached a definitive agreement to purchase Trader Corporation (“Trader”) from Yellow Media for a purchase price consideration of $745M.[29]
  • On 23 December 2011 Apax Partners announced acquisition of the Swiss branch of Orange.[30]
2012
  • In February 2012, Apax sold HiT Entertainment to Mattel for $680 million.
  • On 11 June 2012 an Apax-led consortium announced acquisition of Paradigm Ltd.[31]
  • In September 2012, Apax Partners forms consortium with CEO Stephen Cretier for GardaWorld Security Services.[32]
  • In November 2012, Apax Partners agrees to acquire Cole Haan and completes acquisition 4 February 2013.[33]
2014
  • On 21 January 2014 Apax bought out the remaining 50.1% share of Trader Media from the Guardian Media Group.[34]
  • On 8 December 2014 Apax announced that it had entered into a transaction agreement to acquire 100% of the shares of EVRY.[35]
  • On 9 October 2014 Apax announced that they will acquire Dutch software maker Exact.[36] It closed the transaction in April 2015.[37]
2015
  • 2015 Apax bought 100% of Spanish real state web portal idealista.com
  • In May 2015, Apax Partners agreed to purchase Quality Distribution, a Tampa, Florida-based chemical transport and logistics firm, for $800 million, including assumption of debt. The deal was completed in August 2015.[38]
  • In December 2015, Apax Partners agreed to sell Rhiag-Inter Auto Parts Italia SpA to LKQ Corporation for $1.14 billion.[39]
2016
2017
  • On 23 August 2017 funds advised by Apax Partners announced a definitive agreement to acquire ThoughtWorks, a global software development and digital transformation consulting company.[41]
  • In September 2017, Tom Chapman and Ruth Chapman sold a majority stake of Matchesfashion.com to private-equity funds managed by Apax Partners.[42]
2019

2020

  • In April 2020, Apax Partners finalized the purchase of Coalfire, a cybersecurity firm.[46]
  • In Dec 2020, Azentio Software Private Limited, subsidairy of Apax Partners, buys global software products business of 3i Infotech for Rs. 1000 Cr [47]

Criticisms

British United Shoe machinery (2000)

The circumstances surrounding the demerger, transfer of assets and subsequent collapse of the British United Shoe Machinery in 2000 led to questions about Apax's behaviour being raised in Parliament by MPs of both main parties. After calls for an enquiry into the loss of hundreds of pensions were refused, Ros Altmann, the pensions expert and, as of 2015, UK Pensions minister described it "one of the worst cases ..I have seen ..the actions of the former owners - Apax have been immoral." The politician Ashok Kumar said, "I think these people needed flogging" ..these are greedy, selfish, capitalists who live on the backs of others.[48][49]

Hellas Telecommunications (2015)

Following its sale of Wind Hellas in 2007, Apax and Hellas co-owner TPG were sued by former bondholders of the telecom company, who allege that Apax and TPG unjustifiably enriched themselves from Hellas and misrepresented the true state of its accounts. Apax has countered that some of these bondholders only began their dispute after passing up on the chance of selling prior to the bankruptcy of 2009, and that Apax sold the business in 2007 (almost three years before the bankruptcy) and so was not the legal owner of Hellas during the periods cited in some of the lawsuits. (In 2005 a New York judge awarded $56m to some of these bondholders, made against Hellas Telecommunications Finance and Hellas Finance, rather than Apax or TPG). Other lawsuits related to Apax and TPG's ownership of Hellas are being heard in the USA. In December 2015 a separate legal action brought by the liquidators of Hellas Telecommunications was dismissed by a Luxembourg court.[50][51][52][53][54] In February 2018 the liquidators abandoned their UK case against Apax and TPG after four days of trial.[55]

See also

References
  1. "Apax Partners appoints co-CEOs to replace Halusa," Reuters, December 5, 2013.
  2. "Apax Partners raises $1B tech fund, investing in luxury e-commerce site," Mergers & Acquisitions, December 8, 2017.
  3. "Apax sale marks VC exit," Financial Times, November 7, 2010.
  4. www.webreality.co.uk, Webreality. "Apax - Offices". www.apax.com.
  5. Based on rankings provided by Private Equity International Archived 2015-03-19 at the Wayback Machine based on capital raised between 2007 and 2012.
  6. "Patricof & Co. Ventures Strategically Takes On 'Apax Partners' Name in Plan to Fortify Leading Global Private Equity Role" Business Wire, Sept 10, 2001.
  7. 2006 Wharton Private Equity Conference Keynote Speaker Archived 2007-10-12 at the Wayback Machine
  8. Source: Thomson Financial's VentureXpert www.venturexpert.com Archived 2008-06-02 at the Wayback Machine
  9. POLLACK, ANDREW. "Venture Capital Loses Its Vigor." The New York Times, October 8, 1989.
  10. LUECK, THOMAS J. "HIGH TECH'S GLAMOUR FADES FOR SOME VENTURE CAPITALISTS ." The New York Times, February 6, 1987.
  11. Sorkin, Andrew Ross. "New Fund for Prominent Investor". The New York Times, March 6, 2006.
  12. "Company News; British Buyout Firm Buys out American Buyout Firm." The New York Times, February 25, 2005
  13. Saunders Karp & Megrue: Our Firm (Cached version of company website as of April 2, 2005.)
  14. "Yell.com History - 2000+". Yell.com. Archived from the original on 8 February 2008. Retrieved 2008-01-11.
  15. Yell buys US directories BBC News, 21 January 2002
  16. Europe's IPO trickle could become a flood Businessweek, 21 July 2003
  17. "Apax Saban Arkin Group completes acquisition of controlling interest in leading Israeli telecom company Bezeq". Goliath. 1 October 2005. Retrieved 18 March 2012.
  18. "B Communications Closes Acquisition Of Controlling Interest In Bezeq". RTTNews. 14 April 2010. Archived from the original on 11 September 2012. Retrieved 18 March 2012.
  19. "Private equity firms make fresh bid for Inmarsat". Daily Telegraph. Retrieved 20 March 2019.
  20. Sabbagh, By Dan (2006-10-31). "Bob helps HIT to build its profits". The Times. ISSN 0140-0460. Retrieved 2018-06-29.
  21. "Consortium comprising funds advised by Apax Partners & Mivtach Shamir acquires Tnuva for $1.025 billion". apax. 7 January 2008. Retrieved 12 March 2012.
  22. "Fosun Capital mulls buying Meir Shamir's Tnuva stake - Globes English". Globes (in Hebrew). Retrieved 2017-08-20.
  23. "Funds advised by Apax Partners agree to sell their majority stake in the TriZetto Corporation to Cognizant Technology Solutions". www.prnewswire.com. Retrieved 2018-09-20.
  24. Harrington, BY Amanda Andrews and Ben (2010-10-31). "Apax Partners in the hunt for moneysupermarket". ISSN 0307-1235. Retrieved 2018-09-20.
  25. "Apax buys majority of Israel investment firm Psagot". Ynetnews. Rueters. 11 January 2010. Retrieved 12 March 2012.
  26. "TIVIT - Líder em serviços integrado de tecnologia e possui um portfólio único de soluções". TIVIT.
  27. "Terms of Service Violation". www.bloomberg.com. Retrieved 2018-09-20.
  28. Worthen, Ben (4 May 2010). "Apax Agrees to Acquire Sophos". WSJ. Retrieved 2 April 2014.
  29. "Apax Partners to Acquire Trader Corporation's Auto Assets". Apax Partners. 2011-03-25. Retrieved 2013-08-05.
  30. www.webreality.co.uk, Webreality. "Apax - Error". www.apax.com.
  31. "Apax-led Consortium Agrees to Acquire Paradigm Ltd". Apax Partners. 2012-06-11. Retrieved 2013-08-05.
  32. "Garda announces agreement to be acquired by company Founder and CEO Stephan Cretier and Apax Funds". Apax Partners. 2012-11-07. Retrieved 2013-10-06.
  33. "Apax Partners agrees to acquire Cole Haan". Apax Partners. 2012-11-16. Retrieved 2013-10-06.
  34. Williams, Christopher (2014-01-21). "Guardian Media Group gets 600m for AutoTrader stake". London: The Daily Telegraph. Retrieved 2014-01-21.
  35. "Recommended cash offer by funds advised by Apax to acquire 100% of the shares of EVRY". Apax Partners. 2014-12-08. Retrieved 2014-12-09.
  36. "Apax-Linked Funds to Acquire Dutch Software Maker for $925 Million". The New York Times. 2014-10-09. Retrieved 2016-12-08.
  37. Dorbian, Iris (2015-04-15). "Apax Partners closes buy of Exact for 730 mln euros". pehub.com. PE Hub Network. Retrieved 2016-12-08.
  38. "Private equity firm buys Quality Distribution for $800M," Tampa Bay Business Journal, May 7, 2015.
  39. "LKQ to buy Italy's Rhiag to boost Europe auto spares business," Reuters, December 22, 2015.
  40. Boating Industry (19 July 2016). "New owner for Dominion Marine Media". Boating Industry. Retrieved 3 October 2016.
  41. "Funds advised by Apax Partners to acquire ThoughtWorks, Inc". 23 August 2017. Archived from the original on 23 August 2017.
  42. Clarke, Katherine. "British Fashion Entrepreneurs Spend $24 Million on Modern Los Angeles Compound". The Wall Street Journal. New York City, New York. Retrieved December 18, 2017.
  43. Joshi, Malvika (January 17, 2019). "Apax Funds invests $200 million in Fractal Analytics". Livemint. Retrieved February 12, 2020.
  44. Raghavan, Ranjani (January 16, 2019). "Apax Partners to acquire $200 mn stake in Fractal Analytics". VCcircle. Retrieved February 12, 2020.
  45. "Funds advised by Apax Partners complete the acquisition of Trade Me". Apax Partners. Retrieved 11 May 2019.
  46. Bureau, E. T. (2020-04-24). "Apax Partners Completes Coalfire Acquisition". EnterpriseTalk. Retrieved 2020-04-25.
  47. Apax (2020-12-29). "Apax Partners buys 3i Infotech product business". Apax. Retrieved 2020-12-29.
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  49. "House of Commons Debate on Deferred pensions, 17 January 2006, c234WH". Theyworkforyou.com. Retrieved 8 December 2015.
  50. William Louch (24 December 2015). "Luxembourg court rules in favour of Apax, TPG in Hellas case". efinancialnews.com/. Retrieved 14 January 2016.
  51. Kleyr Grasso (5 January 2016). "Hellas case: Court rejects claim - 5 January 2016". Lexology.com. Globe Business Publishing Ltd. Retrieved 14 January 2016.
  52. Delevingne, Lawrence (20 November 2014). "Greek drama: Telecom focus of bloody PE fight".
  53. "Another Greek tragedy". The Economist. ISSN 0013-0613. Retrieved 2015-12-23.
  54. "Letters". The Economist. Retrieved 2015-12-23.
  55. "COURT: Hellas Telecommunications liquidators abandon lawsuit against Apax and TPG, costs hearing week of 5 March," Debtwire.com, February 23, 2018.
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