Funds advised by Apax Partners sell stake in ECI Software Solutions
On 19 November 2020, the Apax IX Fund (“Apax IX”), in which AGA is a limited partner, announced that it had agreed to sell its stake in ECI Software Solutions (“ECI” or the “Company”), a provider of Enterprise Resource Planning (“ERP”) solutions, to Leonard Green & Partners. As part of the transaction, Apax IX will reinvest some of the proceeds in ECI, retaining a minority stake in the Company. The transaction is expected to close in December 2020 subject to customary closing conditions.
The Apax IX investment in ECI is expected to deliver a total Gross MOIC of 4.2x and a Gross IRR of 55%1. The transaction values AGA’s look through investment in ECI at approximately €39.7m2. This would represent an uplift of c.12% to ECI’s fair value and an uplift of c.€4.3m (c.€0.01 per share) in the Adjusted Net Asset Value (“Adjusted NAV”) of AGA at 30 September 2020.
Note that these figures relate to AGA’s look through position of Apax IX’s overall investment in ECI and are stated before taking into account any closing adjustments, fees, costs, and carried interest, and translated based on today’s exchange rates where applicable3. The sale remains subject to customary closing conditions.
AGA also held a Derived Debt position in ECI. The Derived Debt investment in ECI was fully repaid by the Company in early November 2020 and generated a constant currency Gross IRR of 11.9% and 1.4x Gross MOIC for AGA. Including interest, AGA received a total of €21.6m when the ECI position was repaid.
Drawing on Apax Partners’ deep knowledge of the tech sector and ERP software market, Apax IX identified ECI as an attractive business with solid growth prospects and in 2017 it acquired the Company. Under Apax IX ownership, ECI experienced rapid growth, both organically and through strategic M&A, completing 15 acquisitions which helped the Company gain significant market share and scale internationally.
AGA, whose shares are listed on the London Stock Exchange, provides investors with access to the investment expertise of Apax Partners through its investments in a diversified portfolio of private equity funds advised by Apax Partners as well as derived investments in debt and equity. In May 2016, AGA made a commitment of c.€302m4 to Apax IX.
For more information about the transaction, please visit: https://www.apax.com/news/press-releases/
Investor Relations – AGA
T: +44 207 872 6526
- Represents Gross IRR and Gross MOIC shown for Apax IX euro tranche
- Represents look-through value realised in addition to AGA’s look-through of transaction value re-invested by Apax IX into ECI
- Based on Bloomberg closing EUR/USD FX rate on 18 November 2020 of 1.1853
- Represents AGA’s commitment of €154.5m in Apax IX euro tranche and $175.0m in Apax IX USD tranche translated to euro using latest closing FX rate of 1.1853 at 18 November 2020
- Note that references in this announcement to Apax Global Alpha Limited have been abbreviated to “AGA” or “the Company”. References to Apax Partners LLP have been abbreviated to “Apax Partners” or “the Investment Adviser”
- Please be advised that this announcement may contain inside information as stipulated under the Market Abuse Regulations (EU) NO. 596/2014 (“MAR”)
- This announcement is not for release, publication or distribution, directly or indirectly, in whole or in part, into or within the United States or to “US persons” (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”)) or into or within Australia, Canada, South Africa or Japan. Recipients of this announcement in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of the announcement may be restricted by law in certain jurisdictions
- The information presented herein is not an offer for sale within the United States of any equity shares or other securities of Apax Global Alpha Limited (“AGA”). AGA has not been and will not be registered under the US Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, AGA’s shares (the “Shares”) have not been and will not be registered under the Securities Act or any other applicable law of the United States. Consequently, the Shares may not be offered or sold or otherwise transferred within the United States, or to, or for the account or benefit of, US Persons, except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require AGA to register under the Investment Company Act. No public offering of the Shares is being made in the United States
- This announcement may include forward-looking statements. The words “expect”, “anticipate”, “intends”, “plan”, “estimate”, “aim”, “forecast”, “project” and similar expressions (or their negative) identify certain of these forward-looking statements. These forward-looking statements are statements regarding AGA’s intentions, beliefs or current expectations concerning, among other things, AGA’s results of operations, financial condition, liquidity, prospects, growth and strategies. The forward-looking statements in this presentation are based on numerous assumptions regarding AGA’s present and future business strategies and the environment in which AGA will operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of AGA to be materially different from those expressed or implied by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond AGA’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as AGA’s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which AGA operates or in economic or technological trends or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. AGA expressly disclaims any obligation or undertaking to release any updates or revisions to these forward-looking statements to reflect any change in AGA’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this announcement, or to update or to keep current any other information contained in this announcement. Accordingly, undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this announcement.
About Apax Global Alpha Limited
AGA is a Guernsey registered closed-ended collective investment scheme incorporated as a non-cellular company that listed on the London Stock Exchange on 15 June 2015. It is regulated by the Guernsey Financial Services Commission.
AGA’s objective is to provide shareholders with capital appreciation from its investment portfolio and regular dividends. The Company is targeting an annualised Total Return, across economic cycles, of 12-15% (net of fees and expenses) including a dividend yield of 5% of Net Asset Value.
The investment policy of the Company is to make Private Equity investments in Apax Funds, and Derived Investments which are investments in equities and debt derived from the insights gained via Apax Partners’ Private Equity activities.
Further information regarding the Company and its publications are available on the Company’s website at www.apaxglobalalpha.com.
About Apax Partners LLP
Apax Partners LLP (“Apax Partners”) is a leading global private equity advisory firm and over its more than 40-year history, Apax Partners has raised and advised funds with aggregate commitments of over €40 billion. Funds advised by Apax Partners invest in companies across four global sectors of Tech & Telco, Services, Healthcare and Consumer. These funds provide long_term equity financing to build and strengthen world_class companies.
For further information about Apax Partners, please visit www.apax.com. Apax Partners is authorised and regulated by the Financial Conduct Authority in the UK.
About ECI Software Solutions
ECI Software Solutions provides industry-specific business software solutions and services, focusing on cloud-based technologies. For 30+ years, ECI has served small to medium-sized manufacturing, wholesale/retail distribution, building and construction, and field service organizations. Privately held, ECI is headquartered in Fort Worth, Texas, USA, with offices throughout the U.S., Canada, Mexico, England, the Netherlands, and Australia. For information, email email@example.com, visit www.ECISolutions.com