TIDMAPAX
RNS Number : 2923Y
Apax Global Alpha Limited
08 May 2019
(LSE: APAX)
Apax Global Alpha Limited
Quarterly results for the period ended 31 March 2019
For further information regarding the announcement of AGA's 2019
first quarter results, including the details for today's analyst
and investor webcast at 9.30am (UK time), please visit
www.apaxglobalalpha.com.
Key highlights
-- 1Q19 Total NAV Return(1) was +8.7% (+6.5% constant
currency)(2) . LTM(3) Total NAV Return(1) was +17.2% (+11.5%
constant currency)(2) reflecting strong performance of the Private
Equity portfolio
-- 2018 second semi-annual dividend of 4.12 pence was paid on 5
April 2019, equivalent to 2.5% of euro NAV at 31 December 2018
Outstanding commitments and funding sources
-- AGA was 97% invested with net cash after liabilities of EUR28.0m(4)
-- Outstanding commitments to the Apax Funds (together with
recallable distributions) amounted to EUR259.2m (26% of NAV) with
funding sources of EUR459.0m (46% of NAV). Funding sources comprise
Derived Investments of EUR291.0m, undrawn facility of EUR140.0m,
cash of EUR48.9m and net current liabilities of EUR20.9m
1Q19 performance highlights
-- The contributions to Total NAV Return(1) of +8.7% were:
Private Equity +6.4%, Derived Investments +0.3%, FX +2.2% and costs
and other movements -0.2%
-- Derived Debt contributed +0.5% and Derived Equity -0.2% to Total NAV Return(1)
-- Total Return(1) of Private Equity was 12.3% (10.0% constant
currency). Derived Debt delivered Total Return(1) of 4.8% (2.5%
constant currency). Derived Equity had a Total Return(1) of 1.2%
(-1.5% constant currency)
-- Aggregate Gross IRR(5) and Gross MOIC(5) on Private Equity
two full exits was 38.2% and 3.3x
-- Gross IRR(6) and Gross MOIC(6) on one Derived Debt exit was
2.4% and 1.0x and on three Derived Equity exits was 36.5% and
1.3x
Ralf Gruss, COO of Apax Partners, said:
"The strong operational momentum and strong exits of the Private
Equity portfolio continued in the first quarter of 2019,
translating into value accretion of the Invested Portfolio and
strong performance for AGA."
Adjusted NAV(7) movements Private Derived Cash Facility Other 1Q19 LTM(3)
Equity Investments drawn Total Total
EURm EURm EURm EURm EURm EURm EURm
-------- ------------- ------- --------- ------- -------
Adjusted NAV at 31.12.18 591.5 320.6 17.3 - 1.4 930.8 883.3
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+ Investments 5.1 3.5 (10.4) - 1.8 - -
------------------------------- -------- ------------- ------- --------- ------- ------- -------
- Divestments (0.4) (39.6) 40.6 - (0.6) - -
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+ Interest and dividend
income - - 3.5 - (0.1) 3.4 18.2
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- Unrealised gains/(losses) 59.9 (3.0) - - - 56.9 117.1
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- Realised gains/(losses) - 1.9 - - 1.9 (22.7)
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- FX gains/(losses)(8) 13.4 7.6 0.1 - - 21.1 50.5
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- Costs and other
movements - - (2.2) - 0.3 (1.9) (10.5)
------------------------------- -------- ------------- ------- --------- ------- ------- -------
- Dividends paid - - - - (23.7) (23.7) (47.4)
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- Performance fee
reserve (0.3) - - - - (0.3) (0.3)
------------------------------- -------- ------------- ------- --------- ------- ------- -------
+/- Revolving credit - - - - - - -
facility
drawn/repaid
------------------------------- -------- ------------- ------- --------- ------- ------- -------
Adjusted NAV at 31.03.19 669.2 291.0 48.9 - (20.9) 988.2 988.2
------------------------------- -------- ------------- ------- --------- ------- ------- -------
Private Equity portfolio highlights
-- Private Equity portfolio delivered a strong performance with
a Total Return(1) of +12.3% (+10.0% constant currency)
-- Unrealised gains were EUR59.9m and favourable FX movements were EUR13.4m
-- On a look-through basis, AGA invested or committed c.EUR49.1m in three new companies
-- Calls of EUR5.1m were paid to AIX (EUR3.1m), ADF (EUR1.8m) and AMI (EUR0.2m)
-- Distribution of EUR0.4m to AGA from AMI in relation to Ten Petroleum and Max
-- Aggregate Gross IRR(5) and Gross MOIC(5) on full exits was 38.2% and 3.3x
-- FX exposure of c.51% in US dollar denominated investments
-- Tech & Telco was the most heavily weighted sector,
accounting for 38% of the Private Equity portfolio
-- Private Equity portfolio is diversifying across fund vintages
Private Equity - operational metrics 31 March 2019 31 December 2018
-------------
Portfolio year-over-year LTM revenue growth(9) 13.0% 14.5%
================================================ ============= ================
Portfolio year-over-year LTM EBITDA growth(9) 14.2% 22.2%
================================================ ============= ================
Enterprise Value / EBITDA valuation multiple(9) 14.9x 14.5x
================================================ ============= ================
Net debt / EBITDA multiple(9) 3.9x 4.0x
================================================ ============= ================
Number of new investments in the quarter(10) 3 1
================================================ ============= ================
Number of exits in the quarter(11) 2 0
------------------------------------------------ ------------- ----------------
Derived Investments portfolio highlights
-- A combination of Derived Debt Total Return(1) of +4.8% (+2.5%
constant currency) and Derived Equity Total Return(1) of +1.2%
(-1.5% constant currency) led to an overall Total Return(1) of
+3.2% for Derived Investments (+0.8% constant currency)
-- Realised gains were EUR1.9m and unrealised losses of EUR3.0m
stood against income of EUR3.4m and positive FX movements of
EUR7.6m
-- AGA had one add-on equity investment(12) in QAD
-- AGA exited one debt investment and three equities with proceeds of EUR39.6m(13)
-- Gross IRR(6) on Derived Debt exits was 2.4% and Gross MOIC(6)
was 1.0x. Gross IRR(6) on Derived Equity exits was 36.5% and Gross
MOIC(6) was 1.3x
-- FX exposure of c.62% in US dollar denominated investments
-- Services was the most heavily weighted sector, accounting for
42% of the Derived Investments portfolio
-- Portfolio split between Derived Debt and Derived Equity was 61% and 39% respectively
Derived Investments - operational metrics 31 March 2019 31 December 2018
-------------
Debt year-over-year LTM EBITDA growth(14) 10.6% 7.9%
=============================================== ============= ================
Debt average income yield to maturity(14) 10.5% 10.6%
=============================================== ============= ================
Debt average years to maturity 6.0 6.3
=============================================== ============= ================
Debt average income yield(15) 10.2% 10.3%
=============================================== ============= ================
Equity year-over-year LTM earnings growth(16) 16.0% 19.2%
=============================================== ============= ================
Equity price-to-earnings ratio(16) 23.7x 18.5x
Number of investments in the quarter(12) 1 3
Number of full exits in the quarter(13) 4 6
----------------------------------------------- ------------- ----------------
Other Invested Portfolio highlights
-- Exposures remained weighted towards Private Equity at 70% and Derived Investments of 30%
-- FX exposure c.54% in US dollar denominated investments
Invested Portfolio analysis(19) EURm EURm % %
----- ----- ----
Private Equity 669.5 70%
================================ ===== ===== ==== ====
* AMI 20.4 2%
================================ ===== ===== ==== ====
* AEVI 5.5 1%
================================ ===== ===== ==== ====
* AEVII 63.6 7%
================================ ===== ===== ==== ====
* AVIII 380.0 40%
================================ ===== ===== ==== ====
* AIX 193.8 19%
================================ ===== ===== ==== ====
* ADF 6.2 1%
================================ ===== ===== ==== ====
Derived Investments 291.0 30%
================================ ===== ===== ==== ====
* Derived Debt 178.9 18%
================================ ===== ===== ==== ====
* Derived Equity 112.1 12%
================================ ===== ===== ==== ====
Total 960.5 960.5 100% 100%
-------------------------------- ----- ----- ---- ----
Sector mix EURm Invested Portfolio(19) Private Derived Investments
% Equity %
%
----- ---------------------- -------
Tech & Telco 36% 38% 31%
============= ===== ====================== ======= ===================
Services 29% 23% 42%
============= ===== ====================== ======= ===================
Healthcare 22% 22% 23%
============= ===== ====================== ======= ===================
Consumer 12% 16% 4%
============= ===== ====================== ======= ===================
Digital 1% 1% 0%
============= ===== ====================== ======= ===================
Other 0% 0% 0%
============= ===== ====================== ======= ===================
Total 960.5 100% 100% 100%
------------- ----- ---------------------- ------- -------------------
Geographic analysis EURm Invested Portfolio(19) Private Derived Investments
% Equity %
%
----- ---------------------- -------
North America 51% 49% 58%
==================== ===== ====================== ======= ===================
Europe 27% 32% 12%
==================== ===== ====================== ======= ===================
United Kingdom 8% 6% 14%
==================== ===== ====================== ======= ===================
Israel 4% 5% 0%
==================== ===== ====================== ======= ===================
India 7% 5% 12%
==================== ===== ====================== ======= ===================
China 2% 2% 5%
==================== ===== ====================== ======= ===================
Rest of World 1% 1% 0%
==================== ===== ====================== ======= ===================
Total 960.5 100% 100% 100%
-------------------- ----- ---------------------- ------- -------------------
Summary of top 30 investments in Private Equity and Derived Investments Valuation NAV
EURm %
--------------
Top 30 Private Equity portfolio (look-through basis) - AGA's indirect exposure
=============================================================================== ============== ====
AssuredPartners 79.4 8%
=============================================================================== ============== ====
Exact Software 69.5 7%
=============================================================================== ============== ====
ThoughtWorks 47.9 5%
=============================================================================== ============== ====
Cole Haan 39.1 4%
=============================================================================== ============== ====
Idealista 38.0 4%
=============================================================================== ============== ====
Acelity 35.3 4%
=============================================================================== ============== ====
Engineering 34.6 4%
=============================================================================== ============== ====
Unilabs 34.2 3%
=============================================================================== ============== ====
Vyaire Medical 31.6 3%
=============================================================================== ============== ====
Neuraxpharm 29.9 3%
=============================================================================== ============== ====
Duck Creek Technologies 27.7 3%
=============================================================================== ============== ====
EVRY 26.4 3%
=============================================================================== ============== ====
Paycor 24.8 3%
=============================================================================== ============== ====
Safetykleen 20.2 2%
=============================================================================== ============== ====
Candela 19.5 2%
=============================================================================== ============== ====
Wehkamp 19.5 2%
=============================================================================== ============== ====
MATCHESFASHION.COM 18.8 2%
=============================================================================== ============== ====
Quality Distribution 16.8 2%
=============================================================================== ============== ====
ECi Software Solutions 16.1 1%
=============================================================================== ============== ====
Shriram City Union 14.0 1%
=============================================================================== ============== ====
Tosca Services 11.3 1%
=============================================================================== ============== ====
Genius Sports Group 9.5 1%
=============================================================================== ============== ====
Guotai Junan Securities 9.5 1%
=============================================================================== ============== ====
Boats Group 9.2 1%
=============================================================================== ============== ====
Authority Brands 8.9 1%
=============================================================================== ============== ====
Attenti 8.4 1%
=============================================================================== ============== ====
Tivit 7.9 1%
=============================================================================== ============== ====
Healthium 7.7 1%
=============================================================================== ============== ====
Kepro 7.4 1%
=============================================================================== ============== ====
Psagot 7.4 1%
=============================================================================== ============== ====
Other (Other investments, carried interest, facility & non-current assets) (61.0) (6%)
=============================================================================== ============== ====
Total Private Equity 669.5 68%
=============================================================================== ============== ====
Derived Investments portfolio
=============================================================================== ============== ====
Paycor 23.2 2%
=============================================================================== ============== ====
Syncsort 22.3 2%
=============================================================================== ============== ====
KRKA 20.4 2%
=============================================================================== ============== ====
Rocket Software 17.8 2%
=============================================================================== ============== ====
Quality Distribution 17.7 2%
=============================================================================== ============== ====
Vyaire Medical 16.3 2%
=============================================================================== ============== ====
PowerSchool 13.5 1%
=============================================================================== ============== ====
ECi Software Solutions 13.4 1%
=============================================================================== ============== ====
Sinopharm 13.2 1%
=============================================================================== ============== ====
Alexander Mann 12.9 1%
=============================================================================== ============== ====
Development Credit Bank 12.3 1%
=============================================================================== ============== ====
Safetykleen 10.0 1%
=============================================================================== ============== ====
QAD 9.6 1%
=============================================================================== ============== ====
Lonza 9.2 1%
=============================================================================== ============== ====
PDC Brands 9.0 1%
=============================================================================== ============== ====
LegalShield 8.9 1%
=============================================================================== ============== ====
Sophos 8.3 1%
=============================================================================== ============== ====
Strides Pharma Science 8.0 1%
=============================================================================== ============== ====
Repco Home Finance 7.9 1%
=============================================================================== ============== ====
Just Group 7.4 1%
=============================================================================== ============== ====
CanFin Homes 6.9 1%
=============================================================================== ============== ====
Boats Group 6.5 1%
=============================================================================== ============== ====
Veritext 4.5 1%
=============================================================================== ============== ====
EVRY 4.0 0%
=============================================================================== ============== ====
Answers 1.9 0%
=============================================================================== ============== ====
ERM 1.8 0%
=============================================================================== ============== ====
Cengage Learning 1.2 0%
=============================================================================== ============== ====
Solara 1.2 0%
=============================================================================== ============== ====
Fullbeauty (new 2L debt) 1.1 0%
=============================================================================== ============== ====
Fullbeauty (equity) 0.5 0%
=============================================================================== ============== ====
Total Derived Investments 291.0 29%
=============================================================================== ============== ====
Total Invested Portfolio(17) 960.5 97%
=============================================================================== ============== ====
Cash 48.9 5%
=============================================================================== ============== ====
Revolving credit facility drawn 0.0 0%
=============================================================================== ============== ====
Net current liabilities (20.9) (2%)
=============================================================================== ============== ====
Total NAV 988.5 100%
=============================================================================== ============== ====
Performance fee reserve (0.3)
=============================================================================== ============== ====
Total Adjusted NAV 988.2
------------------------------------------------------------------------------- -------------- ----
For more information, the Company's quarterly results
presentation is available to view at: www.apaxglobalalpha.com
Contact details
Investor enquiries Media enquiries
Sarah Wojcik Andrew Kenny
IR Manager - AGA Head of Communications
Telephone: +44 (0)20 7666 6573 Telephone: +44 (0) 20 7872 6371
Email: sarah.wojcik@apax.com Email: andrew.kenny@apax.com
Footnotes
1. Total NAV Return means the movement in the Adjusted NAV per
share over the period plus any dividends paid. Total Return
reflects the sub-portfolio performance on a stand-alone basis. It
excludes items at overall AGA level such as cash, management fees
and costs
2. Constant currency returns calculated the same as Total NAV
Return adjusted to remove the impact of FX
3. LTM = Last Twelve Months to 31 March 2019
4. Net cash after liabilities of EUR28.0m calculated by taking
cash of EUR48.9 less net current liabilities of EUR20.9m at 31
March 2019
5. Aggregate Gross IRR and Gross MOIC on full exits calculated
based on the expected aggregate cash flows in euro across all funds
for the deals transacted in the period; Exact and Assured Partners
were signed in 1Q19 and are expected to close in 2Q19 and Gross IRR
and MOIC are subject to change once final proceeds have been
received. Gross IRR represents concurrent Gross IRR
6. Gross IRR and Gross MOIC calculated based on aggregate euro
cash flows since inception of deals realised during the year
7. Adjusted NAV represents NAV of EUR988.2m adjusted for the
performance fee reserve of EUR0.3m at 31 March 2019
8. FX on cash includes the revaluation of cash balances and net
losses arising from the differences in exchange rates between
transaction dates and settlement dates, and unrealised net losses
arising from the translation into euro of assets and liabilities
(other than investments) which are not denominated in euro
9. At December 2018 and March 2019, 13 and 15 investments were
respectively excluded as these are financial services companies
often valued on book value or for which earnings financials are not
available e.g. complex carve-outs or growth investments. Net
debt/EBITDA multiple and EV/EBITDA valuation multiple excludes
MatchesFashion and Vyaire Medical due to low EBITDA from opex
investments and short-term fluctuations in EBITDA respectively
10. New investments in the first three months of 2019. Fractal
closed in February 2019; Trade Me signed in December 2018 and
AssuredPartners signed in February 2019 with both expected to close
in 2Q19
11. Represents exits which were signed but not yet closed in the
first three months of 2019. Both AssuredPartners and Exact signed
in February 2019 and are expected to close in 2Q19
12. There was one add-on equity position (QAD) and no new
purchases in the period. FullBeauty second lien debt restructured
in the period and in lieu of this AGA received new second lien
debt, equity and warrants. These have been excluded from the sales
and purchases above
13. One debt position and three equity positions were fully
realised in 1Q19. Additionally, FullBeauty second lien debt
restructured in the period and in lieu of this AGA received new
second lien debt, equity and warrants. These have been excluded
from the sales and purchases above
14. Gross Asset Value weighted average of the respective metric
across the Derived Investments Debt portfolio
15. Gross Asset Value weighted average of the current full year
income (annual coupon/clean price as at the respective date) for
each debt position in the Derived Debt portfolio as at the
respective date
16. Gross Asset Value weighted average of the respective metric
across the Derived Investments Equity portfolio. (Cengage and QAD
were excluded from both LTM earnings growth and P/E ratio due to
negative earnings and Answers and Solara were excluded as
information was not available)
17. Invested Portfolio excludes cash and cash equivalents,
revolving credit facility drawn and net current assets; including
these, the NAV is EUR988.5m. Adjusted NAV excludes the performance
fee reserve of EUR0.3m and is EUR988.2m at 31 March 2019
Notes
1. 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"
2. Please be advised that this announcement may contain inside
information as stipulated under the Market Abuse Regulations (EU)
NO. 596/2014 ("MAR")
3. 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
4. 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
5. 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. 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, cash flow requirements, the
dividend policy and other factors. 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 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 c.EUR40 billion as
at 31 March 2019. 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.
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