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Apax Partners
Type Private Ownership,
Limited liability partnership
Founded 1969
Headquarters London, United Kingdom
New York City, United States
Industry Private Equity
Products Investments, private equity funds
Total assets $20 billion
Employees 100+
Website www.apax.com

Apax Partners is a British private equity and venture capital firm which operates out of nine offices in New York, London, Hong Kong, Mumbai, Tel-Aviv, Madrid, Stockholm, Milan and Munich. The firm, including its various predecessors, have raised approximately $35 billion (USD) dating back to 1969. Apax Partners is one of the oldest and largest private equity firms operating on an international basis, ranked the seventh largest private equity firm globally.[1]

Apax invests exclusively in certain business sectors including: telecommunications, information technology, retail and consumer products, media, healthcare and financial and business services. As of the end of 2007, Apax had invested in approximately 340 companies in all stages of development.

Apax raises capital for its investment funds through institutional investors including corporate and public pension funds, university and college endowments, foundations and fund of funds. One of the firm's co-founders, Alan Patricof, was an early investor in Apple Computer and America Online (AOL).

Contents

History

History of private equity
and venture capital
Objectivist.jpg

Early History
(Origins of modern private equity)

The 1980s
(LBO boom)

The 1990s
(LBO bust and the VC bubble)

The 2000s
(Dot-com bubble to the Credit crunch)

  

Apax Partners Worldwide, as it exists in 2008 is the product of the combination of three firms:

  • Patricof & Co., founded in 1969 by pioneering venture capitalist Alan Patricof;
  • Multinational Management Group (MMG), founded in 1972 by Sir Ronald Cohen and Maurice Tchénio;[2]
  • Saunders Karp & Megrue, founded in 1988 by Thomas A. Saunders III and Allan W. Karp and joined by John Megrue in 1992.
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Patricof & Co. and MMG

In 1969, Alan Patricof founded Patricof & Co. a firm dedicated to making investments in "development capital" later known as "venture capital," primarily in small early-stage companies. Patricof, one of the early venture capitalists, was involved in the development of numerous major companies including America Online, Office Depot, Cadence Design Systems, Apple Computer and FORE Systems.[3] In 1975, Patricof launched 53rd Street Ventures, a $10 million vehicle.

Meanwhile, in 1972, Sir Ronald Cohen and Maurice Tchénio, along with two other partners, founded Multinational Management Group (MMG) with offices in London, Paris, and Chicago. MMG initially was established as an advisory firm, working with small emerging companies, rather than an investment firm. However, MMG initially struggled to gain traction amid the negative economic conditions, particularly in the UK in the mid-1970s.

By 1977, two of the original four founding partners had left MMG, leaving Cohen and Tchénio in need of a partner to help rejuvenate their firm. In that year, Cohen approached Alan Patricof to join them and run the new firm's investments in the U.S. The new firm would be known as Alan Patricof Associates (APA) and ultimately come to be known as Apax Partners. Following the merger, MMG abandoned its advising business, and the new APA shifted its focus exclusively to investing in start-up companies.

Apax in the 1980s, 1990s and the 21st century

Throughout the 1980s, the firm grew steadily raising capital under a series of separate funds. As the 1980s progressed, the firm introduced its first later stage venture fund in 1984, its first growth capital fund in 1987 and its first dedicated European leveraged buyout fund MMG Patricof European Buy-In Fund in 1989.[4] In response to the changing conditions, in the venture capital industry in the 1980s Apax (and other early venture capital firms including Warburg Pincus and J.H. Whitney & Company) began to transition away from venture capital toward leveraged buyouts and growth capital investments, which were in vogue in that decade.[5][6] This trend was more prevalent in Europe than the U.S. where Patricof preferred to continue focusing on venture investments.

In 1991, Apax Partners became the official name for all of its European operations however the U.S. business still operated under the Patricof & Co. name. By the mid-1990s Apax had become one of the larger private equity firms globally.

In 2000, Patricof & Co. adopted the Apax Partners branding and formalized its affiliation with its European business. The U.S. business would operate as Apax Partners, Inc.[2] The following year, Patricof stepped back from day-to-day management of Apax Partners, Inc., the US arm of the firm to return to his original focus on making venture capital investments in small early-stage companies. In 2006, Patricof left Apax to form Greycroft Partners which focuses on small early-stage venture capital investments.[7]

Despite the closer relations between the U.S. and European teams, the firm still operated separate fund entities for each geography. The European side of the business began to pull away in terms of capital commitments, raising more than $5 billion for its 2004 vintage European fund but just $1 billion for its 2006 U.S. vintage fund.[4]

Saunders Karp & Megrue

In 2005, Apax announced it would acquire middle market leveraged buyout firm Saunders Karp & Megrue to augment its buyout business in the United States Saunders Karp, formerly based in Stamford, Connecticut, was founded in 1989 by Thomas A. Saunders III and Allan W. Karp. John Megrue, who today heads Apax's operations in the U.S., had worked as a principal at Patricof & Co. before joining Saunders Karp in 1992.[8] Saunders Karp had received capital commitments from institutional investors including AT&T, the General Electric Pension Trust, Goldman Sachs Private Equity Group, HarbourVest Partners, JP Morgan Fleming Asset Management, New York State Common Retirement Fund and Verizon, among others.[9]

Investments

Pre-2000
  • In 1998, Apax invested in Neurodynamics Limited, which was the parent of Autonomy Corporation. Apax's investment in Autonomy created one of the largest returns in European Venture Capital history with the conversion of around a $3M investment into $900M.
2005
  • Apax purchased a majority stake in Travelex (the world's largest foreign exchange company) for £1.06bn. In Q3 2005 Apax also announced plans to purchase Grupo Panrico, one of Spain's largest food companies and its largest bakery company.
  • As part of the Violet Acquisitions consortium (along with Barclays Capital and Robert Tchenguiz) Apax is involved in the December 2005 purchase of Somerfield, the UK's fifth largest supermarket chain (with around 700 stores). Somerfield was later sold to The Co-operative Group in March 2009.
2006
  • Apax purchased the Tommy Hilfiger Corporation for $1.6 billion, or $16.80 a share, all in cash. In May 2006, this deal was approved by the shareholders of Tommy Hilfiger.
  • In June 2006, Apax acquired HIT Entertainment in a take-private transaction in June 2006.
  • Apax acquired a majority stake in Pictage, Inc. the leading provider of online solutions for professional wedding and portrait photographers. Pictage, Inc. was co-founded by Gary Fong.
  • On 2006-08-21, it was announced that Apax Partners and Bain Capital had joined the enlarged private equity consortium headed by KKR that has agreed to acquire an 80.1% stake in the Semiconductor Division of Royal Philips Electronics. The new company is called NXP Semiconductors.
  • On 2006-10-31, it was announced that Apax Partners had acquired FTMSC (France Telecom Mobile Satellite Communications) which would later be rebranded under the Vizada name in June 2007. This was shortly followed by an announcement on 2007-09-06 explaining that Apax Partners had acquired Telenor Satellite Services which was to be merged into the Vizada brand.
2007
  • In May 2007, Apax signed definitive agreements with funds advised by Apax Partners and OMERS Capital Partners under which such funds acquired the higher education, careers and library reference assets of Thomson Learning, and a consortium of funds advised by OMERS, and Apax acquired Nelson Canada, for a combined total value of approximately $7.75 billion in cash. The higher education, careers and library reference assets include such well-known brands and businesses as: Wadsworth, South-Western, Delmar Learning, Eddie Diamond, Gale, Heinle, Brooks/Cole, Course Technology and Nelson Canada. Nelson Canada is a leading provider of books and online resources for the educational market in Canada. The group will be majority-owned by OMERS.
2008
  • In August 2008, Apax Partners completed acquisition of TriZetto Group.

References

  1. ^ Based on rankings provided by Private Equity International based on capital raised between 2002 and 2007.
  2. ^ a b "Patricof & Co. Ventures Strategically Takes On 'Apax Partners' Name in Plan to Fortify Leading Global Private Equity Role" Business Wire, Sept 10, 2001.
  3. ^ 2006 Wharton Private Equity Conference Keynote Speaker
  4. ^ a b Source: Thomson Financial's VentureXpert www.venturexpert.com
  5. ^ POLLACK, ANDREW. "Venture Capital Loses Its Vigor." New York Times, October 8, 1989.
  6. ^ LUECK, THOMAS J. "HIGH TECH'S GLAMOUR FADES FOR SOME VENTURE CAPITALISTS ." New York Times, February 6, 1987.
  7. ^ Sorkin, Andrew Ross. "New Fund for Prominent Investor". New York Times, March 6, 2006.
  8. ^ "Company News; British Buyout Firm Buys out American Buyout Firm." New York Times, February 25, 2005
  9. ^ Saunders Karp & Megrue: Our Firm (Cached version of company website as of April 2, 2005.)

External links


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