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8 Mar 2016 07:00
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.
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"
FOR IMMEDIATE RELEASE
8 March 2016
(LSE: APAX)
Apax Global Alpha Limited
Audited Results for the period ended 31 December 2015
The financial statements cover the period from 2 March 2015 to 31 December 2015. Where we discuss the trading period to 31 December 2014 this refers to the period as PCV Lux S.C.A ("PCV") and its subsidiaries (collectively the "PCV Group") prior to the acquisition by AGA. Irrespective of whether the text refers to AGA or PCV, references to the trading period from 1 January to 31 December 2015 include trading as PCV prior to the transfer of assets to AGA following the acquisition and listing on 15 June 2015.
For further information regarding the announcement of AGA's 2015 Annual Reports and Accounts, including the details for today's analyst and investor call at 9.30am (UK time), please visit www.apaxglobalalpha.com/investor-information/calendar
Financial highlights for the twelve months to 31 December 2015
· Adjusted NAV, (i.e. NAV excluding performance fee reserves), increased by €110.7m to €923.6m due to investment performance, equivalent to a Total Return of 13.6%
· Adjusted NAV per share is €1.88 (equivalent to £1.38 at 31 December 2015), up from €1.66 pro-forma at 31 December 2014
· First semi-annual dividend announced of 3.69 pence per share, equivalent to 2.5% of NAV at 31 December 2015
· The IPO raised the maximum targeted gross proceeds of €300m(1) and was over-subscribed
· AGA was 98% invested at 31 December 2015 and had a cash balance of €22.9m(2)
Investment highlights for twelve months to 31 December 2015
· Well balanced invested portfolio: Private Equity (52%) and Derived Investments (48%)
· Sector exposure is balanced across all Apax Partners' focus industries. As at 31 December 2015, Services is the sector with the strongest weight, accounting for 31% of the invested portfolio
· Geographic bias towards North America representing 57% of the invested portfolio at 31 December 2015
Operational performance
· Strong investment fundamentals both in Private Equity and Derived Investments, showing resilience and robust trading throughout 2015:
Private Equity - Quarterly Operational Metrics | 31 December 2014 | 31 December 2015 | |
Portfolio year-over-year Last Twelve Months (LTM) revenue growth(3) | 14.4% | 7.8% | |
Portfolio year-over-year LTM EBITDA growth(3) | 11.8% | 9.0% | |
Average EV/EBITDA multiple(3) | 11.3x | 12.4x | |
Average net debt / EBITDA(3) | 4.9x | 4.6x | |
Number of new investments(4) | 4 | 13 | |
Number of exits(4) | 6 | 10 |
Derived Investments - Quarterly Operational Metrics | 31 December 2014 | 31 December 2015 | ||
YTM(5) of debt investments | 9.7% | 11.5% | ||
Average years to maturity for debt investments (in years) | 6.7 | 6.1 | ||
Average income yield(6) of debt investments | 8.0% | 9.6% | ||
Year-over-year LTM EBITDA growth debt investments(7) | 9.3% | 5.0% | ||
Year-over-year LTM earnings growth equity investments(8) | 8.7% | 14.8% | ||
Average P/E multiple(9) of equity investments | 19.9x | 20.0x | ||
Number of new investments(10) | 23 | 16 | ||
Number of full exits(11) | 5 | 8 | ||
· The Investment Manager has highlighted the following in Private Equity portfolio
o Apax Private Equity funds are exploiting strong exit markets and have returned €24.6m to AGA since 31 December 2014
o Apax Private Equity funds made 13 new investments in 2015, thereof 11 new investments by Apax VIII and two by AMI
· The Investment Manager has highlighted the following in Derived Investments
o Fully exited four debt investments and five listed equity investments, realising total proceeds of €125.4m. In addition, partial realisations totalled proceeds of €1.0m.
o In the 12 months to 31 December 2015, AGA made ten new investments in debt, two add-ons to current debt positions and four new investments in listed equities totalling €249.1m in the year to 31 December 2015.
Commenting on the results, Tim Breedon CBE, Chairman of Apax Global Alpha, said:
"I am delighted to present our first annual results since the Company's successful move on to the London Stock Exchange in June 2015, and to announce the payment of our first semi-annual dividend to shareholders.
"It has been an excellent first year as a public company; AGA successfully raised €300m(1) from its IPO and has made strong progress in investing the proceeds, by contributing to Apax private equity funds and investing in other asset classes derived from Apax's private equity activities. In line with our strategy, we recently announced our intention to commit US$350m to the Apax IX private equity fund and have fully realised our last legacy hedge fund investments.
"Our portfolio has performed well and we have seen a nearly 14% rise in Adjusted NAV and Adjusted NAV per share. This is an excellent result in what have been difficult markets and AGA's portfolio has outperformed all relevant benchmark indices.
"With the increased volatility in the markets, new interesting investment opportunities arise. AGA will continue to exploit value opportunities, including those opened up by market dislocations. We look forward with confidence to the year ahead."
Commenting on AGA's investment focus, Ralf Gruss, COO of Apax Partners, said:
"AGA's Invested Portfolio is split evenly, with 52% in Private Equity and 48% in Derived Investments. The strong performance of the portfolio was achieved despite more volatile conditions across our markets during the second half of 2015.
"Over the past year, the investment focus has been on deploying the net proceeds raised from the Initial Public Offering into both Private Equity and Derived Investments. Markets offer interesting investment opportunities for AGA following recent corrections and the ability of AGA to exploit opportunities across different sectors, geographies, and asset classes is predestined to benefit from a continuation of the more volatile market environment."
Financial highlights
Private Equity
€m | Derived Investments
€m | Cash and Legacy Hedge Funds €m | Others
€m | Total
€m | |
NAV as at 31 December 2014 | 198.8 | 294.8 | 38.7 | 4.9 | 537.2 |
+ Net IPO proceeds | - | - | 275.0 | - | 275.0 |
+ Investments | 211.1 | 249.1 | (460.2) | - | - |
- Divestments | (24.6) | (117.2) | 143.8 | - | 2.0 |
+ Interest and dividend income | - | - | 23.2 | - | 23.2 |
+/- Unrealised gains | 82.8 | (9.0) | - | - | 73.8 |
+/- FX gains | 5.5 | 23.4 | 4.4 | - | 33.3 |
+/- Costs and others | (2.0) | (6.0) | (8.0) | ||
NAV as of 31 December 2015 | 473.6 | 441.1 | 22.9 | (1.1) | 936.5 |
+/- Change in performance fee reserve | (4.2) | (8.7) | - | - | (12.9) |
Adjusted NAV as of 31 December 2015 | 469.4 | 432.4 | 22.9 | (1.1) | 923.6 |
Invested portfolio analysis at 31 December 2015
Asset class (excluding hedge funds) |
€m |
€m |
% |
% |
Private Equity | 473.6 | 52 | ||
- AEVI | 6.5 | 1 | ||
- AE VII | 87.1 | 9 | ||
- AE VIII | 376.5 | 41 | ||
- AMI | 3.5 | 1 | ||
Derived Investments | 441.1 | 48 | ||
- Debt | 346.7 | 38 | ||
- Equities | 94.4 | 10 | ||
Total | 914.7 | 914.7 | 100 | 100 |
Sector mix |
€m | Portfolio
% | Private Equity
% | Derived Investments % |
Tech & Telco | 259.9 | 28 | 31 | 26 |
Services | 286.1 | 31 | 35 | 27 |
Consumer | 224.2 | 25 | 21 | 28 |
Healthcare | 133.3 | 15 | 11 | 18 |
Other | 11.2 | 1 | 2 | 1 |
Total | 914.7 | 100 | 100 | 100 |
Geographic analysis |
€m | Portfolio
% | Private Equity
% | Derived Investments % |
North America | 523.3 | 57 | 51 | 64 |
UK | 46.6 | 5 | 6 | 4 |
Switzerland | 14.2 | 1 | 0 | 3 |
Rest of Europe | 206.4 | 23 | 32 | 12 |
India | 83.4 | 9 | 7 | 12 |
China | 26.1 | 3 | 1 | 5 |
RoW | 14.7 | 2 | 3 | 0 |
Total | 914.7 | 100 | 100 | 100 |
Summary of top 10 investments in Private Equity and Derived Investments
Valuation €m | % of NAV | % of invested portfolio | |
Top 10 Private Equity | |||
EVRY ASA | 43.5 | 5 | 5 |
GlobalLogic Inc | 37.8 | 4 | 4 |
Assured Partners | 28.8 | 3 | 3 |
Azelis S.A. | 28.4 | 3 | 3 |
Exact Software | 27.8 | 3 | 3 |
Full Beauty | 25.3 | 3 | 3 |
One Call / Align | 24.6 | 3 | 3 |
Garda | 23.1 | 2 | 3 |
Wehkamp | 21.3 | 2 | 2 |
Answers Corporation | 15.6 | 2 | 2 |
Other | 197.4 | 21 | 22 |
Total Private Equity | 473.6 | 51 | 52 |
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Top 10 Derived Investments |
|
|
|
Full Beauty | 31.4 | 3 | 3 |
Assured Partners | 30.8 | 3 | 3 |
Exact Software | 25.4 | 3 | 3 |
Epicor | 21.2 | 2 | 2 |
Compuware | 20.7 | 2 | 2 |
Azelis Finance | 19.6 | 2 | 2 |
Genex | 19.1 | 2 | 2 |
Rue21 Inc | 19.0 | 2 | 2 |
Acelity (Kinetic Concepts) | 18.1 | 2 | 2 |
Answers Corporation | 17.9 | 2 | 2 |
Other | 217.9 | 23 | 24 |
Total Derived Investments | 441.1 | 47 | 48 |
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Total Investments | 914.7 | 98 | 100 |
Cash | 22.9(4) | 2 | 0 |
Net current assets | (1.1) | 0 | 0 |
Total NAV | 936.5 | 100 | 0 |
Contact details
Investor Relations | |
Sarah Wojcik | |
Telephone: | +44 (0)20 7872 6300 |
Email: | investor.relations@apaxglobalalpha.com |
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|
Media enquiries (Apax Global Alpha Limited) | |
Georgiana Brunner/Matthew Goodman/Annabel Clay, Greenbrook Communications | |
Telephone: | +44 (0)20 7952 2000 |
Email: | aga@greenbrookpr.com |
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|
Media enquiries (Apax Partners LLP) | |
Alex Wessendorff | |
Telephone: | +44 (0)20 7872 6461 |
Email: | alex.wessendorff@apax.com |
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|
Company Secretary | |
Matt Horton/Jacques Colley, Aztec Group | |
Telephone: | +44 (0)1481 749 700 |
Email: | AGA-Admin@aztecgroup.co.uk |
Notes
1. 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.
2. 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.
Footnotes
(1) Total proceeds of €300m were raised based on the FX rate at the date of allocation prior to IPO. A total of €301.4m was raised when the proceeds were recalculated to euro based on the exchange rate at close of business on the date of listing the 15 June 2015.
(2) Comprises €21.5m held in AGA directly and €1.4m held in subsidiaries.
(3) Represents the weighted average of the respective metrics across the underlying portfolio companies, using latest available information.
(4) Represents investments and exits during the year ending at the indicated date. Note that the 13 new investments during 2015 excludes the additional AEVII stake acquired by AGA during 2015. In addition the 10 exits during 2015 includes 6 full exits and 4 significant partial exits
(5) GAV weighted average yield to maturity (YTM) of the Derived Debt Investments
(6) GAV weighted average of the current full year income (annual coupon/clean price as at 31 December 2015) for each debt position in the Derived Debt Investments at 31 December 2015
(7) GAV weighted average of latest available EBITDA growth, since prior year, of the underlying Derived Debt Investments
(8) GAV weighted average of the latest earnings growth, since prior year, of the underlying Derived Equity Investments
(9) GAV weighted Price Earnings multiple of Derived Equity Investments
(10) New investments in debt in 2015 were 2 positions in Azelis, Epicor, 2 positions in Exact Holdings, Physiotherapy, Genex, Synlab, Quality Distribution, Assured Partners, Full Beauty, Rue 21 and new equity positions in Hinduja Global Solutions, Sinopharm, Cinda Asset Management and LIC Holdings.
(11) Disposals in 2015 consisted of debt realisations in Auto Trader, Apax Europe VII Co-invest facility, Synlab and Azelis and full equity realisations in KPIT, China Rundong, Telecity and HDFC.
About Apax Global Alpha Ltd
AGA is a Guernsey closed-ended investment company that listed on the London Stock Exchange on 15th June 2015.
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 (NAV), once fully invested.
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. The Company's portfolio is expected to be allocated in approximately equal proportions between Private Equity and Derived Investments, although the investment mix will fluctuate over time due to market conditions, investment opportunities, cashflow requirements, the dividend policy and other factors.
About Apax Partners LLP
Apax Partners LLP ("Apax Partners") is a leading global private equity advisory firm. It operates globally and has more than 30 years of investing experience. Apax Partners has advised funds that total over €34 billion in aggregate as at 31 December 2015. 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 LLP is authorised and regulated by the Financial Conduct Authority in the UK.