New York-based Fenway Partners completed its acquisition of Targus Group International, a maker of laptop carrying cases. The New York-based firm agreed to acquire the business from Apax Partners in $382.5 million (€326 million) transaction.
Apax was the selling party on the deal, but Saunders Karp & Megrue was the original investor in the company. The firm gained a gained a 60 percent stake in the business through a 1996 recap, valued at roughly $100 million, according to press reports at the time. The firm initially capitalised the deal with more than $20 million of equity, and later added compact-disc storage company Roundhouse to the platform through a $205 million add-on deal.
The combined company was added to Apax’s portfolio when the firm merged with Saunders Karp earlier this year.
The nearly decade-long holding period is longer than most, although Saunders Karp had to endure a minor scandal when Targus’s CFO was found guilty on 15 counts of fraud related to an embezzlement indictment. In spite of the troubles, a source close to Apax confirmed to PEO in September that it was a profitable investment for the group.
Targus is best known for its computer cases, but the company also provides a host of additional accessories, such as wireless mouses, WiFi scanners, notebook cable locks, and other items. The company distributes its products through three primary channels, including retail, corporate distributors and OEMs.
Forty five percent of the company’s sales comes from outside of the US, and according to Timothy Mayhew, an operating executive at Fenway, the firm will continue to push Targus’s presence further into international markets.
“The company already has a great foundation [internationally], and we intend to take advantage of its global heft,” Mayhew told PEO when the firm first agreed to acquire the company. “The US is already ahead of the rest of the world in terms of [notebook use], and we’re seeing great growth in Asia and Europe… Those regions are further behind in laptop usage, but Asia is actually the fastest growing market for Targus right now.”
Merrill Lynch and Citigroup advised the seller on the transaction, while Ropes & Gray provided legal counsel to both Apax and Fenway.
Fenway is investing out of its second fund for the transaction. The firm, which is reportedly in the midst of fundraising, would not comment on its third fund, although according to reports, Fenway is eyeing between $800 million and $1 billion for the investment vehicle. The firm did say Targus would be the final platform acquisition of its second fund.