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The strategy of Apax Partners is to support companies with high growth potential:
Technology
Technology, which lies at the heart of the strategy and processes of any business, is a sector in constant flux. The opening of a company’s information systems to the outside world, the development of network computing and roaming systems, changing business models and the reservoir of innovation specific to this industry all mean that this sector offers numerous investment opportunities.
In concrete terms, we identify investment opportunities in certain information technology segments that match our expertise and include hardware and software technologies, emerging application areas, and services based on the mastery of these new technologies.
Our desire to participate in projects with the potential to create high added value, supported by ambitious entrepreneurs, has resulted in our investments in young companies such as Parkeon (world leader in on-street parking management solutions), IEE (developer of sensors for automobile security systems), GFI (IT services provider) and Altran (European leader in innovation consulting).
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Telecom
2010 was an active year for the telecom sector. The major players in the market maintained the level of their investments, particularly with the deployment of optical fibre in major metropolitan areas. Innovative services—3G, IP-TV, VoD, etc.—continued to develop successfully, particularly mobile broadband, which has made a significant breakthrough in Western Europe. Finally, the consolidation of the sector continued among operators and Internet service providers, reflecting the dynamic performance of the industry as a whole. Despite the turbulence in the financial markets and the background of global recession, the great majority of telecom players are achieving generally positive operating results.
In this context, the investments that we look for fall into two main categories:
First are companies with recurring cash flows that allow for the raising of debt financing through an LBO operation. This involves certain telecom operators, cable operators and technology companies that have achieved a certain level of maturity.
The second type of opportunity consists of companies that are currently benefiting from the new dynamic performance of the sector, whose cash flow generation profile permits only a limited level of debt. The companies we look for are businesses that, in addition to having a top-rank management team and technology that is usually proprietary, have demonstrated their ability to increase sales rapidly and become leading global players.
Overall, we closely monitor changes in the sector and the recovery of investments in specific segments, particularly those related to voice-data-video convergence, and the development of new mobile services.
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Retail & Consumer Goods
The desire of consumers to find differentiated goods and services in attractive spaces is creating an extremely wide range of opportunities for consumer goods and specialist retailing.
These businesses are coming up against increasing complexity and have to face new challenges, with the emergence of new distribution channels such as e-commerce, the need to develop strong, close-knit, tailored customer relations (CRM) or the incorporation of the all-important sustainable development issues into business strategy.
However, the slowdown in global consumption underscores the selectivity of consumers as they assess different brands when making purchasing decisions, while facing what they perceive to be limited purchasing power and growth prospects in the near future.
The investment strategy of Apax Partners in specialist retailing and consumer goods is designed to support ambitious entrepreneurs who want to build leading companies in their market, founded on strong and differentiated store or retail concepts, and on brands or store names with a broad and authentic territory.
Apax Partners is interested in all market segments: home appliances, personal goods, direct retail and e-commerce, B-to-B distribution, and consumer goods from major brands and distributors, with a preference for concepts in which the offer is created and managed by the distributor.
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Media
The media sector is continuing its rapid transformation. The development of new technologies and the growth of the Internet are encouraging the emergence of new models and permanently transforming an industry that is consolidating against the backdrop of a changing regulatory framework. In this context, there are opportunities to create value. In order to identify and finance these opportunities, our strategy is to maintain a high level of expertise in all media sectors by contributing our know-how in information and telecom technologies.
The quality of the management team, the value of the brands, the sustainability of the business models in a digital world and the potential for growth are decisive factors in the selection of our investments. For this reason, we finance high-potential companies in sectors where we have developed real expertise and which offer attractive prospects of growth. Business, scientific and technical information, marketing and research services, traditional and online media agencies, rights, premium content and Internet content platforms are the sectors that we favour.
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Healthcare
Healthcare expenditures represent a significant share of individual and collective spending in France (11% of GDP in 2009). Despite government efforts to contain these costs, they are expected to grow between 3% and 4% over the next 20 years. This growth is supported by structural factors such as an aging population, the pursuit of well-being and technological progress. These trends create opportunities to develop innovative, high-performing companies capable of answering this growing social need.
Thanks to the industry expertise of a team of Healthcare specialists, we are assisting the development of established players with strong growth potential in areas such as healthcare services (hospitalisation structures, home healthcare and medical analysis). We are also investing in innovative activities such as medical devices, and in niche pharmaceutical laboratories. Finally, we are supporting dynamic, ambitious companies in related activities such as dermo-cosmetics, pharmaceutical development, and services and databases for healthcare organisations. The quality of the teams of executives and entrepreneurs is a key factor in our choice of investments.
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Business & Financial Services
Business services have demonstrated strong overall resilience to the current cycle. For major groups, outsourcing non-core services has emerged as a well-adapted response to a difficult environment as it allows them to control their cost base, find their way through an increasingly complex regulatory framework and positively manage social issues. Given this environment, Business Process Outsourcing and Facility Management continue to benefit from the growing number of outsourcing RFPs.
We are also seeing in these fields the emergence of independent players taking advantage of disposals by diversified groups. Through its strong experience in build-up operations as well as sector expertise, our dedicated Business Services team is well positioned as a partner of choice for outstanding managers building leading companies in these activities.
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