Apax makes 40x return on healthcare exit

Apax Partners has sold Healthcare at Home, a home healthcare services business, to Hutton Collins, a London-based mezzanine and preferred capital provider, for around £250 million (€370 million, $510 million) – delivering a return of more than 40 times its original investment in 1995.

The staggering return is impressive but not unprecedented. Balderton Capital netted a return of 40 times the original investment when it sold its stake in Betfair, a UK online gambling exchange, to Japanese tech business Softbank in 2006. Sequoia Capital’s sale of video sharing website YouTube to Google in 2006 delivered a return of 44 times for the firm.

Healthcare at Home provides home healthcare services to 40,000 patients in the UK. The original investment came out of Apax UK Fund V, which closed in 1995 with £164 million of capital commitments, and which is now fully realised.

Adrian Beecroft, senior managing partner at Apax, said: “When Apax first invested in Healthcare at Home twelve years ago the company had four employees. Today it has more than 600. This is a prime example of private equity taking a long-term approach, helping a talented management team to create hundreds of jobs.”

Apax’s other healthcare exit of 2007 was Molynlycke Health Care, a Swedish manufacturer of surgical care products, which it sold in January to Investor and Morgan Stanley Principal Investments for €2.9 billion.

Apax bought two healthcare companies in 2006 – Capio, a Swedish operator of hospitals and diagnostics centres, and General Healthcare Group, the UK’s biggest operator of private hospitals.

The firm is reported to be preparing a £1.3 billion bid for the business-to-business assets of Emap, the struggling owner of lads’ mag FHM and UK radio stations Kiss and Magic.