Update on Capital
Allocation
Further to the announcement on 2 May
2024 the Board has undertaken a review of Apax Global Alpha
Limited's ("AGA" or the "Company") capital allocation policy.
Today, the Company is pleased to announce the conclusion of this
review and present the details of the new framework which becomes
effective immediately.
Key
highlights
· Creation of a
Distribution Pool1 which earmarks funds on AGA's balance
sheet available for share buybacks, allowing the Board to take
advantage of the opportunity presented by wide discounts to create
immediate value for shareholders by investing in the Company's own
shares.
· 100% of
"Excess Cash Flow" intended to be allocated to the Distribution
Pool on an annual basis until its size reaches 5% of the Company's
Net Asset Value ("NAV").
·
The Board has decided to seed the
Distribution Pool with €30m. Share Buyback Programme to commence
immediately.
· Continued payment of regular dividends to shareholders
semi-annually, with the dividend being set at an absolute level of
11p per share per annum. The Board believes that this provides
shareholders with certainty of income. The dividend of 11p per
share is equivalent to 5.1% of AGA's NAV as at 31 March 2024 and
represents a current dividend yield of c.7%2. To ensure
shareholders continue to benefit from the Company's growth the
Board may also consider distributing capital through a special
dividend as part of its capital allocation framework.
· The new
capital allocation framework constructed in line with AGA's
investment objectives to maximise returns for shareholders across
economic cycles, and taking into account AGA's overall financial
position which continues to be prudently managed.
· The
new framework reflects feedback received from shareholders
representing the majority of the Company's share capital,
suggesting that they would like to see buybacks added to the
"capital allocation toolkit" available to the Company.
Commenting on the new capital
allocation framework, Karl Sternberg, incoming Chairman of AGA,
said: "The Board believes that AGA's
current discount to NAV presents an attractive opportunity for AGA
to create immediate value for shareholders by investing in the
Company's own shares. As such, we have authorised launching a Share
Buyback Programme immediately.
AGA's new, flexible framework gives
the Board the tools it needs to allocate capital as effectively as
possible for the benefit of shareholders whilst also ensuring the
Company continues to grow over time through investments in AGA's
Private Equity portfolio. The regular dividend offers an attractive
yield and provides shareholders with certainty over the income they
can expect from the Company in the future."
New
capital allocation framework explained
The new capital allocation framework
will be implemented without compromising the Company's investment
strategy, portfolio composition, or balance sheet.
The Board will create a Distribution
Pool1 which earmarks funds on AGA's balance sheet
available for share buybacks. The Board intends to allocate 100% of
"Excess Cash Flow" to this Distribution Pool until the size of the
Distribution Pool reaches 5% of the Company's NAV. "Excess Cash
Flow" will be assessed annually and is defined as distributions
from AGA's underlying Private Equity portfolio and cash income from
the Company's Debt portfolio less capital calls paid, costs and
expenses, repayment of the RCF, and dividends paid.
The Board will consider using funds
from the Distribution Pool for share buybacks if AGA's shares trade
at a discount in excess of 23% to the last published NAV, in line
with the Company's prospectus. The Board is committed to maximising
value for shareholders and will retain flexibility with regards to
the level of discount at which it believes buying its own shares is
more accretive than making new portfolio investments.
To take advantage of the investment
opportunity presented by the current wide discount to NAV and AGA's
available liquid resources, the Board has authorised commencing a
Share Buyback Programme immediately and it has allocated €30m to
seed the Distribution Pool, representing 2.4% of NAV as at 31 March
2024.
In addition to share buybacks, AGA
will continue to pay regular dividends to shareholders
semi-annually, with the dividend being set at an absolute level of
11p per share per annum. This is equivalent to 5.1% of AGA's NAV as
at 31 March 2024, currently yielding c.7% based on latest share
price2. To ensure shareholders continue to benefit from
the Company's growth the Board may also consider distributing
capital through a special dividend as part of its capital
allocation framework.
The share repurchases will be
conducted within the limits approved by shareholders at the
Company's Annual General Meetings ("AGM"). At the Company's most
recent AGM, held on 1 May 2024, shareholders authorised AGA to
repurchase up to 14.99% of its issued share capital at the time. As
at today's date, the Company has authority to purchase up to
73,616,005 shares prior to the next AGM, which is expected to be
held in May 2025.
An update on the new capital
allocation framework will be presented at the Capital Markets Day
due to be held today at 15:00 UK. To register for the event, please
visit AGA's website:
https://www.apaxglobalalpha.com/investor-centre/financial-calendar
END
Contact details
Investor Relations - AGA
Katarina Sallerfors
T: +44 7436908492
E:
katarina.sallerfors@apax.com
Footnotes
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1.
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Distribution pool will be held in
cash and Debt investments
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2.
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Share price as at close of business
on 25 June 2024
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Notes
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1.
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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" or "the Investment Adviser"
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2.
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Please be advised that this
announcement may contain inside information as stipulated under the
Market Abuse Regulations (EU) NO. 596/2014 ("MAR")
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3.
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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
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4.
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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
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5.
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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.
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About Apax Global Alpha Limited
AGA is a Guernsey registered
closed-ended investment Company listed on the London Stock
Exchange. 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).
The Company makes Private Equity
investments in Apax Funds, and has a smaller portfolio of primarily
debt investments, derived from the insights gained via Apax's
Private Equity activities.
Further information regarding the
Company and its publications are available on the Company's website
at www.apaxglobalalpha.com.
About Apax
Apax Partners LLP ("Apax") is a
leading global private equity advisory firm. For over 50 years,
Apax has worked to inspire growth and ideas that transform
businesses. The firm has raised and advised funds with aggregate
commitments of more than $77 billion. The Apax Funds invest in
companies across four global sectors of Tech, Services, Healthcare
and Internet/Consumer. These funds provide long-term equity
financing to build and strengthen world-class companies. For
further information about Apax, please visit www.apax.com.
Apax is authorised and regulated by
the Financial Conduct Authority in the UK