US deals take Apax’s total past $3bn this year

Buyout firm Apax Partners has sealed two US acquisitions, taking the total value of its North American deals this year past $3bn.

Apax is set to take private US-listed software group Epicor and acquire peer Activant Solutions from a group of private equity investors in a combined deal worth about $2 billion, the firm said.

The deals bring the firm's current buyout fund, the €11.2 billion Apax Europe Fund VII, to about 70% invested, a source close to Apax said. The firm is expected to return to market with a new buyout fund later this year.

Together with Apax’s acquisition of Canadian publishing company Trader Corporation for $745 million last month, and an investment in outsourcing business iGate Corporation through its portfolio company Viscaria in January, the firm has signed North American deals worth almost $3 billion this year.

Apax offered $12.50 per share for NASDAQ-listed Epicor, representing a premium of 11.2 percent to the closing share price last Friday, and a 34.4 percent premium to its average closing price for the previous 52 week period, according to an Epicor statement.

The Epicor portion of the deal is worth $976 million, according to Epicor, with Apax providing 100 percent of the equity financing for the transaction. Epicor’s board unanimously approved the offer, which is expected to close by the end of the second quarter, Apax said.

Apax is acquiring Activant from buyout peers Hellman & Friedman, Thoma Bravo, and JMI Equity.

Jefferies & Company and RBC Capital Markets are acting as financial advisors to Apax on the deal, with Kirkland & Ellis providing legal advice.

Apax said it planned to merge Activant and Epicor to create what it said would be “one of the largest global providers of enterprise applications focused on the manufacturing, distribution, services and retail sectors”. On completion, the new company will be called Epicor Software Corporation, Apax said. The firm predicted the new business would have annual revenues of $825 million.

Jason Wright, a partner at Apax, said: “In addition to the immediate product and service portfolio enhancements that will result from the combination, both companies’ customers will benefit from the strong financial backing of Apax Partners and our commitment to building the new Epicor into the global leader for enterprise business applications.”

A spokesman for the firm said Apax had no pre-allocation strategy with regard to sectors or geography, instead considering deals on a case-by-case basis across its global teams. The spate of North American deals merely reflected recent opportunities there, he added.