Apax and TPG make 4.5 times money on TIM Hellas(2)

Apax Partners has completed its second lucrative exit in two weeks after selling TIM Hellas, the Greek mobile operator it co-owned with Texas Pacific Group, to Egyptian telecoms entrepreneur Naguib Sawiris.

Apax Partners and Texas Pacific Group have sold TIM Hellas, Greece’s third largest mobile operator, to Egyptian telecoms entrepreneur Naguib Sawiris for €3.4 billion ($4.4. billion), netting a total return on the deal of 4.5 times cost.

The sale comes just two months after the two firms refinanced TIM Hellas for a second time.

Philippe Costeletos, a managing director at TPG, said: “The capital structure put in place in December allowed anyone to come in and buy the equity without triggering a change of control as long as the bonds trade above a certain level.”

Sawiris will buy TIM Hellas through his investment vehicle Weather. The deal will have an enterprise value of €3.4 billion, comprising €500 million of equity and €2.9 billion of debt.

Apax and TPG bought the firm just 20 months ago for €1.6 billion.

The two buyout firms have since brought in a new management team, introduced a successful turnaround plan and completed the €360 million bolt-on acquisition of Q-Telecom, a smaller Greek mobile operator.

Giancarlo Aliberti, a managing director at Apax Partners, said: “Management did a great job in reversing a very serious downward trend of operational performance we found when we acquired the company. The subsequent combination of TIM Hellas with Q-Telecom contributed in a second stage to create a strong company with excellent long-term prospects.”

The sale comes just two months after the two sponsors decided against selling the company, opting instead for a refinancing to pay themselves a dividend. They had already refinanced the company once before, in March, and the proceeds of the two deals allowed them to recoup about twice their initial equity investment.

It is the second foray into the European telecoms market for Sawiris, the owner and founder of Egyptian telecoms firm Orascom. In 2005 he created the Weather vehicle to buy Wind, Italy’s third-largest mobile operator, for €12.1 billion.

It is also the second big exit for Apax this year. Two weeks ago the firm made a return of over ten times its initial investment from the €2.9 billion sale of Mölnlycke, a Swedish healthcare business.

These realisations come at a good time for Apax, as it approaches a first close of €8.5 billion on its latest fundraising.