Apax wins Auto Trader race

Apax Partners has become the second buyout firm to invest in Trader Media, a specialist publishing arm of the Guardian Media Group. It has bought a 49.9 percent stake, in a deal that values the company at £1.35 billion.

Apax Partners has won the auction to acquire a minority stake in the Guardian Media Group’s Trader Media division, in a deal that values the publisher of magazines like Auto Trader at £1.35 billion (€1.9 billion; $2.5 billion).
Auto Trader is the UK’s leading car sales magazine and website, and one of the most profitable parts of GMG’s business. The price tag of £1.3 billion values the company at a multiple of more than eleven times its 2006 earnings of £119.5 million.

Apax has had to settle for a 49.8 stake in Trader, since GMG was keen to retain majority control of the business. This would allow the group to realise some cash to pay off its outstanding debts, while continuing to use the strong cashflows of the business to support its other interests, such as the Guardian and Independent newspapers.

GMG chief executive Carolyn McCall said the sale was “good news for GMG and Trader”. She added: “We have been able to take advantage of the strong appetite for quality media assets and retain a majority stake in this superb company, from which we expect continued growth.”

Other bidders thought to have been involved in the auction, which was run by Merrill Lynch, included CVC Capital Partners and The Blackstone Group. UK buyout firm Candover reportedly pulled out after deciding the business had become too expensive, according to the London-based Times newspaper.

Apax becomes the second private equity firm to own a stake in Auto Trader. BC Partners owned a 52 percent stake until 2004, when it was bought out by GMG in a deal that valued the business at £1.1 billion.

It is the latest in a string of media deals for Apax, with recent acquisitions including business publisher Incisive Media and broadcaster Central European Media Enterprises.