Apax Partners has offloaded 233.6 million shares – almost its entire remaining stake – in London-listed online classifieds site Auto Trader at 365 pence per share, generating gross proceeds of around £852.8 million (€1.08 billion; $1.19 billion).
Following completion of the share placing, Apax will be left with a stake of around 1.8 percent which will be subject to a 90-day lock-up, according to a statement from Auto Trader.
The total gain from the investment for the 2007-vintage, €11.2 billion Apax Europe VII, including the remaining stake, will be £1.7 billion, representing a gross money on invested capital (MOIC) of around 4.9x and an internal rate of return of around 27 percent, according to a source familiar with the matter.
In euro terms, the investment generated a total gain of €2.2 billion, representing an approximate MOIC of 4.6x and an IRR of 25 percent.
Apax acquired 49.9 percent of Auto Trader from the UK’s Guardian Media Group, the published of the Guardian and Observer newspapers, in 2007, and in 2014 acquired the remaining 50.1 percent stake from the group for £619 million.
The firm floated Auto Trader in March 2015 in one of the largest listings on the London Stock Exchange, pricing its shares at 235 pence, which gave the company a market capitalisation of £2.35 billion.
Since January 2014 Apax funds have realised $18 billion, with full and partial exits delivering a gross MOIC of 3.5x, and a gross IRR of 28 percent in euro terms, it is understood.
In December Apax agreed to sell Rhiag-Inter Auto Parts Italia to LKQ Corporation in a deal valuing the business at €1.04 billion. Rhiag is a business-to-business distributor of aftermarket spare parts for passenger cars and commercial vehicles.
The sale will be the first full realisation from Apax VIII, a 2012-vintage fund which closed on $7.5 billion in June 2013. The transaction will deliver proceeds of €540 million to the Apax funds, representing a MOIC of 3.3x and an expected gross IRR of more than 60 percent for Apax VIII in euro terms and its predecessor Apax Europe VII, and a 2.5x gross MOIC and a gross IRR of more than 45 percent for Apax VIII in dollar terms, as reported by Private Equity International.
Apax will be keen to demonstrate a strong track record of exits to investors as it seeks to raise $7.5 billion for its ninth flagship buyout fund.
Apax is offering LPs in Fund IX the choice to be paid out through a deal-by-deal style waterfall instead of the usual European-style fund model in a bid to better compensate and retain junior level talent, a source familiar with the matter told PEI in December. It is understood that the carry earned through the deal-by-deal portion of the fund will not be available to Apax’s equity partners.
Approximately $2 billion of that committed capital will be allocated to the deal-by-deal structure and LPs will be offered that option on a first-come, first-served basis, as reported by PEI.
At 10:30 GMT Auto Trader shares were trading down 6.07 percent at 363.6 pence per share, giving the business a market capitalisation of £3.87 billion.