The company manager must be backed by a shareholder who has global knowledge of the sector in which the company operates

Eddie Misrahi, CEO of Apax Partners, tells us how his company helps managers turn their businesses into worldwide SMEs.

Apax Partners’ reserved CEO, Eddie Misrahi, wanted to devote this first issue of Apax Talks to international growth because this is now “one of the priorities of company managers“. Yet it was also because international growth is a means of development that often requires the support of a shareholder: “Apax Partners has assisted with the international expansion of more than 200 SMEs and mid-size companies“, he explains.

In the offices on rue Paul Cézanne where Apax Partners recently set up its headquarters, Eddie Misrahi exchanges views with the entrepreneurs who consult him on a daily basis. “For many mid-sized companies, the true growth prospects lie outside France“, he says. “This can be seen in our portfolio, with companies like Altran, Amplitude, Vocalcom, Europe Snacks and the INSEEC Group, which are actively expanding abroad“.

So, expand abroad – good idea, but who with? Eddie Misrahi sums up his strategy: “We chose not to be a generalist partner, so as to prove to company managers that we know their sector. We believe we can bring them much more than just money“. He explains: “In the thirty years that Apax Partners has been investing in Healthcare, Retail & Consumer, TMT and Services, we have built a network with the best intermediaries in each industry. We act simultaneously as a consulting firm, a merchant bank, a sounding box and someone with whom managers can discuss their growth strategies“.

These are all roles that have punctuated the career of Eddie Misrahi (Harvard, ex‑McKinsey & Company) and the Partners working for Apax Partners. Among them are Bruno Candelier (ex-McKinsey & Company), Gilles Rigal (ex-BMC Software) and Bertrand Pivin (Harvard, ex-Alcatel), who contributed to this first issue and together have 30 years’ experience of working abroad, from Germany to the United States via South Africa and the Middle East.

Eddie Misrahi believes that, in order to bring international growth plans to fruition, managers must be backed by a shareholder who has global knowledge of the sector in which the company operates. “A finance specialist alone will not help the company manager realise the full value potential of his or her business“. Citing the example of the success enjoyed by Arkadin, the CEO explains that international expansion is one means by which businesses increase their resale value. “When we became shareholders of Arkadin, the company was present in three countries. When we sold it, it was no longer a small French business but a worldwide mid-size company operating in more than twenty countries“.

Based on which criteria does Apax Partners choose the SMEs and mid-size companies it assists with international growth? Eddie Misrahi cites three: “First and foremost, the crucial question: is their offering competitive outside France? By how much will the product have to be adapted in order to succeed elsewhere? Finally, is the management team ready to lead an international growth project?

It is a winning combination, as the investment fund was awarded the 2014 prize for “Best French Mid & Upper Mid LBO Fund”, which rewards long-term value creation. However, international growth cannot take all the plaudits: “International growth is just one driver of performance among many. Others include digital transformation and build-up strategies“, warns Eddie Misrahi. No doubt we will learn about them in a future issue of Apax Talks!

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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.