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Share Name Share Symbol Market Type Share ISIN Share Description
Apax Global Alpha Limited LSE:APAX London Ordinary Share GG00BWWYMV85 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.50 -0.25% 200.50 199.00 200.50 201.00 197.00 201.00 10,324 10:12:13
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 192.2 178.8 36.3 5.3 985

Apax Global Alpha Limited Quarterly results for 30 September 2020

04/11/2020 7:00am

UK Regulatory (RNS & others)


Apax Global Alpha (LSE:APAX)
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TIDMAPAX

RNS Number : 1582E

Apax Global Alpha Limited

04 November 2020

(LSE: APAX)

Apax Global Alpha Limited

Quarterly results for the period ended 30 September 2020

Key highlights

-- Strong performance during the quarter: AGA's Total NAV Return(1) was 8.5% (11.7% constant currency).

-- Exposure to Tech & Telco / Digital, Services, and Healthcare underpinned resilience of the portfolio during Covid-19 and is driving strong returns in the Private Equity portfolio.

-- Two Private Equity exits signed (idealista, Neuraxpharm) and two IPO's (Duck Creek, Max Stock) at an average uplift of 63%(2) to June 2020 valuations.

-- New Private Equity investment in legal practice management software provider MyCase announced.

-- AGA's liquidity position is healthy with EUR72.9m of cash and its revolving credit facility of EUR140.0m remained undrawn. Derived Investments of EUR275.7m provide a further source of funding for AGA.

-- Dividend of 4.87p paid during the period, in line with AGA's stated dividend policy of distributing 5% of NAV per annum.

-- Whilst the economic outlook remains uncertain with Covid-19 infection numbers rising across the globe, the Apax Funds' focus on: i) sub-sector expertise; ii) driving business transformation; and iii) investing with modest average entry leverage levels leaves the portfolio well-positioned as the pandemic evolves.

Commenting on the results, Ralf Gruss, COO of Apax Partners, said:

"Despite the challenging environment, we are pleased to see that AGA's investment strategy and sector focus have delivered continued strong NAV performance in the quarter. In the private equity portfolio, there were several successful realisations in the period as well as attractive new investments. Whilst the impact of further lockdown measures remains to be seen, AGA's private equity portfolio has proven to be resilient and is well positioned."

Financial highlights

-- Significant growth in Adjusted NAV(3) to EUR1.12 billion, up from EUR1.06 billion in the last quarter.

-- Portfolio weighted towards Private Equity (74%) vs. Derived Investments (26%), and resilient sectors such as Tech & Telco (44%), Services (27%) and Healthcare (19%).

 
 Adjusted NAV (3)       EUR 1,124m   GBP 1,020m 
 Adjusted NAV (3) per   EUR 2.29     GBP 2.08 
  share 
                       -----------  ----------- 
 NAV (3) per share      EUR 2.29     GBP 2.08 
                       -----------  ----------- 
 
 
                        Exposure   Q3 2020        Q3 2020 
                                              constant currency 
 Total NAV Return(1)                8.5%           11.7% 
                       ---------  --------  ------------------- 
 Total Return(1) - 
  Private Equity          70%       12.4%          15.9% 
                       ---------  --------  ------------------- 
 Total Return(1) - 
  Derived Debt            22%       2.1%            5.7% 
                       ---------  --------  ------------------- 
 Total Return(1) - 
  Derived Equity           3%      (2.4%)          (1.0%) 
                       ---------  --------  ------------------- 
 Cash & Others             5% 
                       ---------  --------  ------------------- 
 

Private Equity portfolio highlights

-- The Private Equity portfolio performed strongly in the quarter: Total Return(1) of 12.4% (15.9% constant currency).

-- Exit activity reflective of Apax Partners' investment strategy and sub-sector expertise (software, digital marketplaces, and specialty pharmaceuticals) and showing a significant re-rating at exit, with portfolio companies having undergone a business transformation under the Apax Funds' ownership.

-- Aggregate Gross IRR(4) and Gross MOIC(4) on Private Equity full exits and IPO's in Q3 2020 were 51% and 5.5x respectively.

-- On a look-through basis, AGA invested c.EUR7.9m in one new investment (MyCase) which also closed in the period.

-- Continued strong operating performance from the portfolio companies: Revenue and EBITDA growth of 10.4% and 17.8% respectively across the Private Equity portfolio.

Derived Investments portfolio highlights

-- Derived Investments leverage the insights and expertise of the Investment Advisor. The portfolio is weighted towards Tech & Telco and is predominantly invested in Derived Debt (88% of Derived Investments).

   --      Solid performance of Derived Debt with a Total Return(1) of 2.1% (5.7% constant currency). 

-- Limited exposure to Derived Equity with remaining portfolio still affected by depressed valuation multiples across a number of positions. Total Return(1) of (2.4%) ((1.0%) on a constant currency basis).

-- Derived Debt exited FullBeauty debt at a Gross MOIC(5) of 0.7x, generating proceeds of EUR1.1m. Gross IRR(5) on Derived Equity exit Lonza was 35.0% and Gross MOIC(5) was 1.7x.

   --      Deployment of excess liquidity into Derived Debt with new investments of EUR13.6m. 

For further information regarding the announcement of AGA's 2020 third quarter results, including the Company's results presentation and details for today's analyst and investor webcast at 9.30am (UK time), please visit www.apaxglobalalpha.com .

Contact details

 
  Katarina Sallerfors 
    Investor Relations - AGA 
   Telephone: +44 (0)207 666 6526 
   Email: katarina.sallerfors@apax.com 
 

APPIX

Movements in NAV

 
 Adjusted NAV(3) movements      Private        Derived     Cash   Treasury   Facility   Other(4)     3Q 20       LTM 
  (EURm)                         Equity    Investments              Shares      drawn                Total       Sep 
                                                                                                                  20 
                               --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 Adjusted NAV at 30.06.20         742.5          281.5     33.8          -          -        2.9   1,060.7   1,055.8 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 + Investments                      0.3           13.6    (3.7)          -          -     (10.2)         -         - 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 - Distributions/ 
  divestments                    (47.5)         (18.1)     67.0          -          -      (1.4)         -         - 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 + Interest and dividend 
  income                              -              -      6.8          -          -      (1.6)       5.2      20.0 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Unrealised 
  gains/(losses)                  113.5            5.4        -          -          -          -     118.9     151.4 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Realised gains/(losses)          -            2.2        -          -          -          -       2.2      13.4 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- FX gains/(losses)(6)        (24.7)          (8.9)    (0.7)          -          -          -    (34.3)    (53.5) 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Costs and other 
  movements                           -              -    (3.8)          -          -        1.8     (2.0)     (7.7) 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
  - Dividends paid                    -              -   (26.5)          -          -          -    (26.5)    (52.9) 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Performance fee 
  reserve(7)                          -              -        -          -          -          -         -     (2.3) 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Treasury shares                  -              -        -          -          -          -         -         - 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 +/- Revolving credit                                                                                              - 
  facility 
  drawn/repaid                        -              -        -          -          -          -         - 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 Adjusted NAV at 
  30.09.20 (3)                    784.1          275.7     72.9          -          -      (8.5)   1,124.2   1,124.2 
-----------------------------  --------  -------------  -------  ---------  ---------  ---------  --------  -------- 
 
 

Private Equity - operational metrics

 
Private Equity - operational metrics              30 September 2020  30 June 2020 
                                                  ----------------- 
Portfolio year-over-year LTM revenue growth(8)                10.4%         11.0% 
================================================  =================  ============ 
Portfolio year-over-year LTM EBITDA growth(8)                 17.8%         16.0% 
================================================  =================  ============ 
Enterprise Value / EBITDA valuation multiple(8)               17.8x         17.0x 
================================================  =================  ============ 
Net debt / EBITDA multiple (8)                                 4.1x          4.2x 
================================================  =================  ============ 
Number of closed investments in the period(9)                     3             6 
================================================  =================  ============ 
Number of exits for the period(9)                                 2             3 
------------------------------------------------  -----------------  ------------ 
 
 

Derived Investments - operational metrics

 
Derived Investments - operational metrics        30 September 2020  30 June 2020 
                                                 ----------------- 
Debt year-over-year LTM EBITDA growth(10)                    22.4%          9.7% 
===============================================  =================  ============ 
Debt average income yield to maturity(10)                     8.8%          9.2% 
===============================================  =================  ============ 
Debt average years to maturity                                 5.5           5.7 
===============================================  =================  ============ 
Debt average income yield(11)                                 7.8%          7.8% 
===============================================  =================  ============ 
Equity year-over-year LTM earnings growth(12)                 5.2%          7.0% 
===============================================  =================  ============ 
Equity price-to-earnings ratio(12)                            7.8x         20.8x 
Number of investments for the period(13)                         4             4 
Number of full exits for the period (14)                         2             7 
-----------------------------------------------  -----------------  ------------ 
 

Other Invested Portfolio highlights

 
Invested Portfolio analysis(15)    EURm     EURm    %     % 
                                  -----  -------  --- 
Private Equity                             784.1        74% 
================================  =====  =======  ===  ==== 
 
  *    AMI                         21.8            2% 
================================  =====  =======  ===  ==== 
 
  *    AEVI                         5.2            0% 
================================  =====  =======  ===  ==== 
 
  *    AEVII                       29.1            3% 
================================  =====  =======  ===  ==== 
 
  *    AVIII                      263.8           25% 
================================  =====  =======  ===  ==== 
 
  *    AIX                        435.4           41% 
================================  =====  =======  ===  ==== 
 
  *    ADF                         28.6            3% 
================================  =====  =======  ===  ==== 
 
  *    AX                           0.2            0% 
================================  =====  =======  ===  ==== 
Derived Investments                        275.7        26% 
================================  =====  =======  ===  ==== 
 
  *    Derived Debt               243.4           23% 
================================  =====  =======  ===  ==== 
 
  *    Derived Equity              32.3            3% 
================================  =====  =======  ===  ==== 
Total                                    1,059.8       100% 
--------------------------------  -----  -------  ---  ---- 
 

Footnotes

 
 
    1.    "Total NAV Return" means the movement in the Adjusted NAV 
           per share over the quarter plus any dividends paid. "Total 
           Return" reflects the sub-portfolio performance on a stand-alone 
           basis. It excludes items at the overall AGA level such as 
           cash, management fees, and costs 
    2.    Valuation uplifts on exits are calculated based on the total 
           actual or estimated sales proceeds and income as appropriate 
           since the last Unaffected Valuation. Unaffected Valuation 
           is determined as the fair value in the last quarter before 
           exit, when valuation is not affected by the exit process 
           (i.e. because an exit was signed, or an exit was sufficiently 
           close to being signed that the Apax Funds incorporated the 
           expected exit multiple into the quarter end valuation). 
           Average uplift of full exits and IPO's in the current quarter 
           calculated based on the expected sales proceeds from the 
           two full exits signed (idealista & Neuraxpharm) and the 
           fair value based on the closing share price at 30 September 
           2020, in addition to proceeds received in the quarter for 
           the two IPOs (Duck Creek & Max Stock). Genius Sports Group 
           which announced that it would go public through a combination 
           with a special purpose acquisition vehicle post quarter 
           end. 
    3.    Adjusted NAV and NAV were the same at EUR1,124.2m as the 
           performance fee reserve was nil at period end 
    4.    Private Equity Aggregate Gross IRR and Gross MOIC calculated 
           based on the expected aggregate cash flows in euro across 
           all funds for the deals signed and IPO'd in the period (idealista, 
           Neuraxpharm, Duck Creek & Max Stock) . Gross IRR represents 
           concurrent Gross IRR. 
    5.    Derived Debt and Equity Gross MOIC and /or Gross IRR calculated 
           based on aggregate euro cash flows since inception for deals 
           fully exited during 3Q 2020. FullBeauty (debt) and Lonza 
           (equity). 
    6.    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 
    7.    Movement in the LTM Sep 20 Private Equity performance fee 
           reserve of EUR 2.3 m reflects the increase and settlement 
           of the performance fee reserve by the Company's purchase 
           of shares in the market and subsequent issuance of those 
           shares to the Investment Manager. This does not represent 
           the underlying Private Equity portfolio's carried interest. 
           There was no performance fee accrued during 3Q 2020 or YTD 
           2020 
    8.    Gross Asset Value weighted average of the respective metric 
           across the portfolio. LTM Revenue growth and LTM EBITDA 
           growth rates exclude companies where EBITDA is not meaningful 
           such as financial services or high growth business with 
           fluctuations in EBITDA. Huayue Education and TietoEVRY are 
           also excluded due to the unavailability of reported data. 
           Net debt/EBITDA multiple and EV/EBITDA valuation multiple 
           excluded companies where EBITDA is not meaningful such as 
           financial services or high growth business valued on a revenue 
           basis. MATCHESFASHION.COM is excluded due to low EBITDA 
           from opex investments and short-term fluctuations in EBITDA. 
    9.    Private Equity closed 3 investments in 3Q 2020. Innovage 
           closed in July 2020 and PriceFx closed in August 2020 whilst 
           MyCase closed in September 2020. Apax VIII signed the sales 
           of idealista and Neuraxpharm during the period. Additionally 
           Apax VIII's investment Duck Creek listed in August 2020 
           and AMI's investment Max Stock listed in September 2020. 
    10.   Gross Asset Value weighted average of the respective metric 
           across the Derived Debt portfolio 
    11.   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 
    12.   Gross Asset Value weighted average of the respective metric 
           across the Derived Equity portfolio. (Answers, FullBeauty 
           and Cengage were excluded from both LTM earnings growth 
           and P/E ratio) 
    13    Represents two new debt investments (first lien positions 
           in PCI and Veritext) and two add-ons to existing positions 
           (Amerilife and a delayed draw of Evercommerce) . There were 
           no new equity positions. 
    14    Represents exits in Derived Debt (FullBeauty) and Derived 
           Equity (Lonza) in 3Q 2020 
    15    Invested Portfolio excludes cash and cash equivalents, revolving 
           credit facility drawn and net current assets, including 
           these the NAV is EUR1,124.2m and Adjusted NAV was the same 
           as there was no performance fee reserve at 30 September 
           2020 
 
 

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.

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 EUR40 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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