2016 NEWS

investments

Investments across all funds 2011-2016 - Apax Partners

Two investments 
in market leading businesses.

Two investments 
in market leading businesses - Apax Partners

divestments

Four divestements with strong 
value creation.

Four divestements with strong 
value creation - Apax Partners

Key figures

3
bn
funds managed and advised
601
m
proceeds across all funds
20
%
gross portfolio return
369
m
investments and commitments
131
m
co-invested by our investors
15
portfolio companies at 31 December 2016
56,300
people employed
6.5
bn
total revenue
17.9
%
average revenue growth
20
%
average EBITDA growth
19
build-up acquisitions

portfolio company value creation

Internationalisation

International activities now represent 65% of our portfolio companies’ annual revenue.

  • After opening its first stores in China and Chile and acquiring 55 stores in Spain in 2016, Groupe AFFLELOU now has nearly 500 stores outside France.
  • The FDA approval delivered in January 2017 provides Amplitude Surgical access to the US market. The company has also been investing in the development of recently-launched subsidiaries, notably Romania, South Africa and Japan. In Brazil, the company acquired the remaining 40% minority interests in Amplitude Latam.
  • THOM Europe has significantly expanded internationally to become the #1 jewelery retailer in Europe with c. 1,000 stores across France, Italy, Germany, Belgium and the Netherlands.
  • With the acquisition of TEMS, InfoVista improves its global presence, particularly in the USA and in Asia.

 

19 Build-ups

€900m additionnal revenue and €120m additional EBITDA.

900m€ additionnal revenues and 120m€ additional EBITDA - Apax Partners

Digitalisation

  • In 2016, Groupe AFFLELOU acquired the internet sites Happyview.fr and Malentille.com, bringing in an experienced team of digital experts in the optical sector to support the group’s omnichannel strategy.
  • INNOV INSEEC and its five incubators in Paris, Lyon, Bordeaux, London and Geneva give students the resources they need to become tomorrow’s digital entrepreneurs. Digital training now represents around 5% of the Groupe INSEEC’s fundamental or continuing education courses. It aims to increase this percentage to 25% within three years.
  • SK FireSafety Group successfully rolled-out digitalisation across the whole unit. It includes the automatisation of maintenance and services through, for example, the use of PDAs to optimise technicians schedules and interventions.
  • Connected equipment and sensors, data analytics, remote monitoring and diagnosis are being adopted by maritime companies to reduce their operating costs (fuel, maintenance, staff on board…). This trend offers promising opportunities for Marlink to enhance customer stickiness and cross-sell value-added services beyond connectivity.

Social report

Apax Partners is one of a handful of private equity firms to publish a corporate social responsibility report covering the companies in its portfolio.

Our reporting on ‘human capital’ includes workforce evolution, distribution of created jobs, and an analysis of social policies. All of our portfolio companies’ General Managers and Human Resource Directors participated in the report, ensuring the data provides a complete overview of Apax Partners’ 2016 year-end of portfolio companies.

In this report, the 2016 human capital results are compared with the 2015 data, so as to preserve a constant base.

EMPLOYMENT

56,300
employees
7,160
net employment increase

FRANCE

+
12
%
of our portfolio companies’ workforce is in France
48
%
of our portfolio companies’ workforce is in France

WAGES AND SALARIES

3
bn
total value of wages and salaries
+
10
%
average wages and salaries
+
20
%
distributed through wage agreements and profit-sharing

AGREEMENTS AND PROFIT-SHARING SCHEMES

11
portfolio companies concerned
9.8
m
allocated to employees
+
20
%
agreements and profit-sharing allocated to employees
254
collective agreements signed

TRAINING

667,000
allocated to employees
11,600
employees received training
+
24
%
of employees received training
24.6
m
dedicated to improving the talents of the workforces

Environmental, Social and Governance Responsibility (ESG) actions

Groupe AFFLELOU

Eco-responsible collections for Afflelou 
Groupe AFFLELOU offers eco-responsible collections made from a material, M49, a biosourced acetate. Made by processing two natural fibers – cottonseed, and resinous softwood – M49 has passed a battery of exhaustive tests at the largest specialised laboratories in the world to be declared 100% biodegradable.

Frédéric Poux,
CEO

Altran

Opening a direct dialogue with employees
The Engaged People program aims at improving the work environment and creating a common management style and culture across the group. To prepare this program, Dominique Cerutti and the management committee opened a direct dialogue with more than 1,600 employees during 131 meetings organised in 15 countries.

Eric Bachellereau,
Senior Vice-President Human Resources

Amplitude Surgical

Our Environment is paramount!
Amplitude Surgical is proud to have reduced its environmental footprint by deploying various actions.
Waste-sorting implementation, construction of a new warehouse complying with thermal regulation (RT2012), reduction of our power consumption by using LED lighting, and decreasing our water consumption by installing equipment reducing waste.

Olivier Jallabert,
CEO

Europe Snacks

Europe Snacks deploys a health and safety policy
Europe Snacks is committed to making everyone safety actor. Thus, various tools were deployed in 2017: training for the supervisory teams, implementation of daily safety points, organisation of weekly observation and safety meetings. Everyone can issue requests for security improvements studied every week by managers.

Maud Hubert,
Environment & Safety Manager

Gfi Informatique

Partner of Plaine Commune
The partnership with Plaine Commune is an excellent way to advance hand in hand for local development in order to strengthen the link between economic development and employment while facilitating the lives of Gfi Informatique employees on the territory.

Marlène Escure,
Director Recruitment France

GROUPE INSEEC

When CSR meets Entrepreneurship: An Acceleration Program dedicated to “Tech for Good”
With its partners Orange, Microsoft, La Ruche and The Social Factory, Groupe INSEEC has launched a new contest dedicated to “Tech for Good” in France in order to identify and accompany 15 start-ups each year in CSR fields. This digital contest in favour of digital start-up companies has a positive impact on territories sustainable development.

Sylvie Faucheux,
President of the CSR commission

InfoVista

65% of the French employees telework regularly!
Telework is a strategic tool for promoting development of employees whose optimal work situations don’t correspond to traditional hours or places of business. It is also one of the multiple solutions to address climate change and environmental challenges.

Philippe Ozanian,
CEO

Marlink

“Health, Safety & Environment (HSE) is a key priority”
In Marlink, we care, we have a passion for what we do and we deliver as a team. Our partnerships, people and performance make all the difference. Our employees are our most valuable resource, they are Marlink. Consequently, HSE, implicit Social Responsibility, has high priority.

Stein Anderssen,
Chief of Staff

Melita

Reducing carbon footprint of Datacenter
Melita will progressively build out solar energy to power our datacenter, the largest and most advanced facility of its kind in Malta. The project will have several phases but the final goal will be to produce all our energy without emitting CO2 in the atmosphere.

Simon Montanaro,
Chief Technical Officer

NOWO & ONI

Creating social capital through food (Partnership with Re-food)
Nowo & ONI partnered with Re-food, with our staff donating food items at the office collection points. Re-food is a Portuguese independent non-profit organisation that delivers food to people who need food assistance, using its volunteers.

Miguel Veiga Martins,
CEO

Sandaya

Acquisition of its first ecolabel awarded campsite
In 2016, Sandaya has acquired its first ecolabel awarded campsite. This label aims at improving environmental friendly practices. Thanks to this experience, Sandaya will roll out ESG practices on other campsites.

François Georges,
Co-founder

SK FireSafety Group

Fire Safety is sustainability
By preventing and extinguishing fire, we protect people, planet and profit. In our way of doing business we take our social responsibility and strive to make fire safety even more sustainable. It’s in our DNA to save lives, how much more sustainable can you be?

Ewald Draaijer,
CEO

Highlights

January
Acquisition of Nowo & ONI in Portugal. Nowo is the second-largest cable operator and ONI is one of the leading telecoms operators.

February
Closing of the acquisition of Melita, leading converged telecommunications operator in Malta.

April
Acquisition of InfoVista, worldwide provider of network performance software solutions.
Divestment of Capio, a leading provider of private healthcare 
services in Europe.
Miguel Veiga Martins is appointed Chief Executive Officer of Nowo & ONI.
TEXA, leader in loss adjustment and services for insurance companies, reinforces its Construction Business Unit with the acquisition of Avitech 
and Phare.

May
Acquisition of Sandaya, a French outdoor accommodation group.

June
Closing of the acquisition of Marlink, 
Airbus Group’s Commercial Satellite Communication business.
Marlink and Inmarsat enter strategic alliance 
for Fleet Xpress broadband services.
Divestment of a majority stake in Gfi Informatique.
Divestment of Infopro Digital, the French professional 
information services provider.

July
Acquisition of Laureate Education’s higher education interests in France.
Divestment of TEXA, leader in loss adjustment and services for insurance companies.

October
InfoVista, the leading provider of network performance orchestration solutions, acquires Ascom’s TEMS business.
Europe Snacks, French leading manufacturers of savoury snacks under private label brands, joins forces with Kolak Food Snacks Ltd, its English equivalent.
THOM Europe becomes the leading European jewellery chain 
with the acquisitions of Stroili in Italy and Oro Vivo in Germany.

November
Marlink, the largest satellite communication and digital solutions provider, joins forces with Telemar to create the world’s leading maritime communications, digital solutions and servicing group.

December
Signing of  the divestment of remaining stake in Unilabs, European leader in medical diagnostics.

Portfolio performance

 

Operating performance

Portfolio companies posted a 20% increase in their aggregate EBITDA. This performance can be benchmarked against the aggregate EBITDA of the 34 non-financial companies included in the CAC 40, which posted a 2.4% increase in their aggregate EBITDA.

Operating performance - Apax Partners

Reasonable and stable leverage ratios

The average debt multiple of the portfolio (represented by the ratio of total net debt to EBITDA) is in progression at 4.7x at the end of 2016, against 4.4x at the end of 2015. This increase of the total net debt is mainly due to i) the new transactions achieved in 2016 (Nowo, Melita, Marlink, InfoVista and Sandaya), ii) the main build-ups performed by Groupe INSEEC, Europe Snacks, and iii) THOM Europe high yield add on (Tap), but mitigated by the exit of Capio, InfoPro Digital and TEXA.

The LBO debt multiple averages 3.7x, while the average operating debt multiple is 1x.

Regarding the repayment schedule, amortising debt (tranche A) represents 4.5% of the total LBO debt, while the remaining 95.3% is bullet debt. The portion of LBO debt with maturity dates prior to December 2018 represents 2% of the total.

Leverage ratio - Apax Partners

Gross portfolio return

Gross portfolio return (GPR) measures the change over the year in portfolio valuation, including both realised and unrealised value. It is calculated on a mark-to-market basis and is expressed as a percentage of the opening portfolio value.

In 2016, the 20% EBITDA growth of portfolio companies allowed Apax Partners to generate a GPR of 20% across all its funds, compared with a GPR of 26% in 2015.

Fund performance

Our growth and sector-focused strategy is coherent with our investment objective of maximising return multiples, while maintaining internal rates of return within the top‑quartile of our peer group.

This strategy has proven successful across the fully-invested funds managed by Apax Partners.
In this section, fund performance is first presented globally for all funds invested since August 2000 and then individually for each fund managed by the firm since 1990.

Global Performance

Fund performance figures are based on results at 31 December 2016 and are benchmarked against key stock indices over the period from 2000 to 2016.

The chart below presents the performance of all funds since August 2000, the date at which Apax France VI started investing. The performance is measured as the IRR (internal rate of return) of all investing and divesting cash-flows, using the portfolio value at the end of December 2016 as the terminal value.

The IRR of 19.6% is compared to the performance of various indices applying the same stream of cash-flows over time. This allows the performance of Apax Funds to be compared to investments in each stock market index, based on the premise that the same amounts had been invested and divested.

Strong outperformance - Apax Partners

(1) Source: Euronext, MSCI, Yahoo! Finance. (2) Gross IRRs do not re ect management fees, carried interest, taxes or transaction costs and other expenses borne by investors that reduce net returns. (3) Negative IRR. Note: return gures for public indices generated using gross cash ows for Apax France VI, VII, VIII and IX. The analysis assumes that cumulative drawdowns are invested in and distributions are withdrawn from the index.

Performance by fund

Apax France VI
Apax France VI’s performance is the result of investments in market-leading companies, such as Antalis-TV, Aprovia, Arkadin, Cartesis, Medimedia, Outremer Telecom, Parkeon and Vizada (TMT); Frans Bonhomme (Consumer); Albioma, Alma Consulting Group, Corevalve and Vedici (Services).

Apax France VII
Apax France VII (€900m) closed in 2006. By the end of 2016, nine investments had been sold (Buy Way Personal Finance, Equalliance, Faceo, Infopro Digital, Maisons du Monde, Prosodie, U10, and Capio) and 102% of the fund had been returned to investors. The fund is still invested in five companies: Altran and Gfi Informatique (TMT); Groupe Afflelou, Groupe Royer and THOM Europe (Consumer).

Apax France VIII

Apax France VIII (€704m) closed in 2011. By the end of 2016, more than 93% of the fund was invested and two investments have been sold: Codilink and TEXA. The fund is still invested in eight companies: Amplitude Surgical, Europe Snacks, Groupe INSEEC, Marlink, Melita, Nowo & ONI, SK FireSafety Group, and Vocalcom.

Apax France IX
Apax France IX (€1,030m) started investing in 2016. By the end of 2016, 23% of the the fund was invested in three companies: InfoVista, Marlink, and Sandaya.

Performance by Fund - Apax Partners

Sources Apax France VI: Apax Partners / Cambridge Associates, Private Equity & Venture Capital – Global ex. US, Q3 2016.

Sources Apax France VII and VIII: Apax Partners / Cambridge & Associates, Buyouts – Global ex. US, Q3 2016.