If you're a global buyout firm, there's only one thing better than a massively successful exit while you're trying to raise your biggest ever fund: two massively successful exits.
So it's fair to say that Apax Partners enjoyed a good start to 2007. The buyout firm, which is fast approaching a first close of €8.5 billion ($11.2 billion) on its latest fundraising, completed a lucrative exit from Swedish healthcare business Mölnlycke at the end of January. Two weeks later, it was part of the syndicate that sold Greek mobile operator TIM Hellas for another healthy profit.
The €2.85 billion sale of Mölnlycke generated a return of over ten times Apax's initial investment within just eighteen months. It also vindicated the buyout firm's strategy for the business, which it had been tracking since 2003. Apax, which is run by Martin Halusa, decided that Mölnlycke would be a good fit with the equivalent divisions of medical products business SSL International, so it acquired them in 2004. It was then able to merge them with Mölnlycke after it won the latter at auction in June 2005.
Apax shelved its original plan to float the business after receiving offers from a number of buyout firms, including the Blackstone Group. However, the eventual winners of the auction were Investor, the quoted investment business of the Swedish Wallenberg family, and Morgan Stanley, who paid a 12 times multiple of Mölnlycke's 2006 earnings.
Two weeks later Apax was enjoying another spectacular success, after selling TIM Hellas, Greece's third largest mobile operator, to Egyptian telecoms entrepreneur Naguib Sawiris for €3.4 billion ($4.4. billion) deal. This time the firm netted a total return of 4.5 times cost.
Since buying TIM Hellas for €1.6 billion in 2005, Apax and co-owner Texas Pacific Group had completed a successful turnaround plan, bringing in a new management team and completing the €360 million bolt-on acquisition of Q-Telecom, a smaller Greek mobile operator. It also refinanced the business twice, recouping double its original investment.
Apax has spent the last year on a charm offensive with investors, as it looks to step up into the mega-fund league. In December, one investor who had seen the memorandum for its latest fund told PEI: “They have been warming investors up for a few months. They have had a good, strong, positive year, returning around €3 billion to investors with a healthy pace of investment.”
ATLANTIC BRIDGE BUYS INTO TELECOMS
European private equity firm Atlantic Bridge Ventures has bought LogicaCMG's telecoms products business for £265 million (€393.6 million). The deal is the ninth investment from the firm's first fund. Atlantic Bridge led a consortium that included Larry Quinn, the former chief executive and chairman of Logica Mobile Networks, Access Industries, a US-based investment firm, and International Investing & Underwriting, Irish entrepreneur Dermot Desmond's private equity vehicle. Founded in 1995, Atlantic Bridge is a multi-stage firm that concentrates on the technology sector and that operates from Dublin and London.
TOM HICKS BUYS LIVERPOOL
Liverpool Football Club has accepted a £470 million (€714 million) bid from buyout veteran Tom Hicks and fellow US sports tycoon George Gillett. Dubai International Capital had pulled out of talks to buy the club after the board failed to approve its bid. The deal makes Liverpool the third English football club to come under US ownership, after Manchester United and Aston Villa.
ALCHEMY PARTNERS MAKES 3.6X ON CAR INSURER
Alchemy Partners, a London-based mid-market firm, has sold Footman James, a classic car insurer, to Aon, a risk management and insurance company, for an undisclosed amount. Aon is thought to have paid about $118 million (€91 million) for the business, giving Alchemy a return of 3.6 times its investment. Alchemy bought Footman James with Viridian, a Northern Ireland energy company, in 2002.
HG IN TRANSMISSION TRADE SALES
HgCapital has sold one division of German signal transmission company Hirschmann Group to Belden, a listed US rival, in a €245 million deal. Hg is expected to realise a return of more than five times its original investment from the partial exit. It bought the Hirschmann Group in 2004 for €115 million. Hg said it is also considering options for the smaller Car Communication division.
INDUSTRI KAPITAL BUYS MOVENTAS
Nordic private equity firm Industri Kapital is buying a 58 percent stake in Moventas, a mechanical transmission equipment manufacturer, from CapMan, another Nordic private equity firm, for an undisclosed amount. CapMan previously held a 77 percent stake and has made a return of four times its original investment. CapMan will remain a minority shareholder in the business with 16 percent.