May 11, 2010 – UK-based Apax Partners has made its first investment in Latin America, a region which weathered a difficult 2009 for private equity firms better than others and which attracted its largest buyout fund on record last month.
Apax said in a statement yesterday that it had agreed to acquire a 54.2% stake in Tivit Terceirizacao de Tecnologia e Servicos, a publicly-listed Brazilian information technology and outsourcing services, from Votorantim Novos Negocios, a Brazil-based venture capital firm, and Patria Investimentos Imobiliarios, a local private equity firm. The deal is worth Brazilian Reais 873m (€383m), according to Dealogic.
Martin Halusa, chief executive of Apax Partners, said: “Our first investment in Brazil advances our global strategy of investing in large companies that have strong, established market positions and the potential to expand. We are excited by Brazil and have been actively sourcing opportunities in the country for some years.”
Apax funds are committing all of the funding for the acquisition in which Credit Suisse was lead financial adviser. JP Morgan also advised the private equity firm.
An Apax spokesman said the firm does not have immediate plans to open an office in Brazil but hopes to make additional investments in the country in the coming years. He said: “Alex Pellegrini, a partner in our retail and consumer group in New York is a dual Brazilian and US citizen and has been leading our efforts in Brazil over the past 24 months.”
Pellegrini has spent 10 years at Apax is expected to be a nominee of Apax on Tivit’s board after working on this transaction.
Technology and telecoms is one of Apax Partners’ five core sectors, alongside retail and consumer, media, healthcare and financial and business services. Last week, Apax agreed to acquire a majority stake Sophos, a UK-based software company.
A survey last month by the Latin America Venture Capital Association, found that private equity and venture capital investment in the region last year fell less than in other parts of the world.
LAVCA said that Latin American investment was $3.3bn (€2.4bn) last year, a decline of 29% from 2008, while fundraising declined 43% to $3.6bn. However, this still compares favourably to the 61% decline in fundraising worldwide, according to data from researcher Preqin.
Advent International also closed its fifth Latin American fund at $1.65bn last month, the region’s largest on record, according to the firm.