LONDON, UK: The Apax IX Fund has signed a definitive agreement to sell portfolio company Authority Brands, a leading US franchisor of residential services.
As part of this transaction, British Columbia Investment Management Corporation (BCI) will invest in consortium with majority shareholder the Apax X Fund.
The purchase price was established by an independent third-party valuation set by BCI. The transaction is expected to close in Q4 2022, subject to customary closing conditions.
The transaction values AGA’s current look through investment in Authority Brands at approximately €47m. This represents an uplift of c.7% to last Unaffected Valuations1 and an uplift of c.€3m (c.€0.01 per share) in the Adjusted Net Asset Value (“Adjusted NAV”) of AGA at 30 June 2022.2
As AGA is also a limited partner in Apax X, on a look through basis, AGA is expected to invest approximately €49m in the company. In July 2019, AGA made a commitment of c.$450m to Apax X.
Since the Apax Funds’ initial investment in 2018, Authority Brands has grown from two home service franchisors into the premier home service franchisor in North America with 12 franchisors currently, expanding into new geographies and services, and building out a powerful infrastructure.
The new consortium intends to build on this success, backing a scaled, market leading business with a large and stable addressable market, which still has significant room for continued market share capture and outperformance.
The consortium will continue to partner with the management team in the next phase of the company’s journey as they look to extend their platform through M&A, and strategic initiatives including franchise development, technology transformation, and international expansion.
“We could not be more pleased than to continue to build the premier residential services franchisor in partnership with Apax and BCI,” said Craig Donaldson, Chief Executive Officer of Authority Brands. “Both partners will add substantial value as we aim to capture further share in the highly fragmented home services market.”