Apax Said Close to $1.8 Billion Purchase of Advantage
Apax Partners LLP is close to buying Advantage Sales & Marketing Inc. from private-equity firm J.W. Childs Associates LP and Bank of America Corp. for $1.8 billion, according to a person familiar with the transaction.
An announcement may come as early as today, according to the person, who declined to be identified because the talks are private. The sale, which will result in a threefold profit for its current owners, will close by Dec. 31, said the person.
Advantage Sales, whose customers include Unilever and Johnson & Johnson, generated earnings before tax, interest and amortization of $180 million this year, the person said. The purchase will be the seventh-biggest acquisition involving London-based Apax, according to data compiled by Bloomberg.
Private equity firms are resuming investments after the financial crisis brought dealmaking to a near-halt for two years. The firms have led $205 billion of takeovers this year, more than double the amount in the same period last year, according to Bloomberg data.
Ben Harding, a spokesman for Apax in London, declined to comment. Selena Morris, a spokeswoman for Bank of America, and spokespeople for Boston-based J.W. Childs couldn’t immediately be reached for comments after business hours.
Advantage Sales helps market products, process orders and display goods on store shelves, according to its website. Its more than 1,200 clients have included Wal-Mart Stores Inc.’s Sam’s Club, PepsiCo Inc. and Del Monte Foods Co., Advantage Sales said.
Private equity firms have announced about $44 billion of takeovers in the U.S. retail and consumer industries this year, four times the value in the year-earlier period, according to Bloomberg data. TPG Capital and Leonard Green & Partners agreed this week to buy retailer J. Crew Group Inc. in a transaction valued at about $3 billion.
Apax would become Irvine, California-based Advantage Sales’ third private-equity owner in five years. Merrill Lynch & Co.’s buyout unit and J.W. Childs agreed in March 2006 to acquire a majority ownership interest in the company from Washington-based Allied Capital Corp. in a transaction valued at about $1.05 billion. Merrill Lynch is now a unit of Charlotte, North Carolina-based Bank of America.
Private equity firms like Apax pool money from investors to take over companies, financing the purchases mostly with debt, with the intention of selling them later for a profit.
Apax oversees an 11.2 billion-euro ($15 billion) leveraged buyout fund it raised in 2007. In March, the London-based firm sold clothing maker Tommy Hilfiger to Phillips-Van Heusen Corp. in a transaction valuing the American clothier at 2.2 billion euros. The firm more than quintupled its original investment in four years.
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