Internationalisation, consolidation and digitalization are slated to fuel growth

SVP_4544-SELECTION GLOBALE APAX-2016-04-18An excellent 2015 on all fronts?

2015 was by any measure an excellent year for Apax Partners! We secured three new investments, committing a total €228 million, which allowed our investors to co-invest an additional €99m alongside our funds. We successfully floated two companies and recapitalized a third, realizing €264 million of proceeds across our funds. Gross portfolio returns were 26%, including a 42% gain in the value of companies in Fund VII and 15% in Fund VIII.

Was this year particularly active in terms of deal making?

We achieved all the targets we set. The €228 million committed to three acquisitions was a very satisfactory pace of investment. The result is that our Fund VIII is fully invested with 10 acquisitions secured in four and a half years. That is all the more satisfying as it was achieved in an environment where many institutional investors found it difficult to deploy capital. Our success is testament to the strength of our sector focused strategy and the business networks we have established, which enable us to identify and win transactions.

 

We also have good reason to be pleased by our realizations. We floated Capio in Sweden and Amplitude Surgical in France, both with significant valuation increases and new equity to finance future growth. We recapitalized Altran and fully realized our investment in Albioma, allowing us to close our fund VI. And finally, in November, we agreed to sell a controlling stake in Gfi Informatique.

 

Is it also a strong year in terms of value creation?

We are very happy with the performance of our companies and the value they created. Gross portfolio returns of 26% are an excellent result and are evidence of the strength of our companies given the wider low-growth, though improving, economic environment in Europe.

 

What were the drivers of that value creation?

Apax Partners key levers of growth are internationalisation, consolidation and digitalization.

With regards to consolidation, the 14 portfolio companies with which we started the year made 12 acquisitions, adding €230 million in revenues and €35 million in Ebitda. That is a very significant level of build-up activity.

Acquisitions by portfolio companies also supported our internationalisation strategy. ALAIN AFFLELOU acquired an optical chain in Portugal, while both Altran and Infopro Digital secured deals outside of their home markets. And of course, organic growth in new geographies also played its part.

On digitalization, we continued to work closely with our companies to help them understand and seize digital opportunities. Groupe INSEEC launched an online course in luxury marketing, ALAIN AFFLELOU revamped its e-commerce site, introducing ‘virtual try-on’ technology, while TEXA launched digital initiatives, including an online market place for real estate diagnostics. Many of our companies are still at the beginning of their digital journey, so it remains a key opportunity to accelerate growth and improve valuations.

We also maintained our strong commitment to ESG. This was particularly evident in December at the COP21 summit, when we teamed with four French private equity funds to launch the Carbon 2020 initiative, committing ourselves to reduce portfolio companies’ carbon emissions.

 

What are your expectations for 2016?

We expect another year of double digit Ebitda growth in the portfolio and expect to secure two to three investments. In terms of disposals, the year has started well with the announcement that we are in exclusive negotiations to sell Infopro Digital.

2016 will also be notable for the creation of our new Fund IX. It secured €610 million by its first closing in March, putting it 80% of the way to our target of between €750 million and €900 million.

And we have already had the pleasure of promoting four people: creating a new director and three principals.

Eddie Misrahi Chief Executive Officer Contact informations

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Apax Talks is a digital magazine aimed at company managers. It presents growth levers for SMEs, with a focus on TMT, consumer, healthcare and services sectors.