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In a significant move within the software industry, Apax Global Alpha Ltd. announced its acquisition of Zellis UK Ltd., a leading provider of payroll and HR software solutions in the U.K. The transaction, valued at approximately €36 million ($38.4 million), is to be financed through one of its dedicated funds.

Apax Funds To Acquire Zellis Group : Strategic Acquisition by Apax

Originating from Guernsey, a British Crown dependency, Apax plays a pivotal role as a limited partner in the Apax XI Fund, which executed this private deal with U.S. investment titan Bain Capital LP.

The acquisition is masterfully orchestrated by a team of legal experts, with Kirkland & Ellis LLP's corporate partners Jacob Traff, Stuart Boyd, and Andrew McAlpine taking the lead, alongside a team from Weil, Gotshal & Manges LLP spearheaded by partners Chris McLaughlin, Alex Eagle, and counsel Edward Hyde, all based in London.

Advising Bain and the Bristol-based Zellis, the legal team from Ropes & Gray LLP included private equity transactions partners John Newton and Bill Mone with senior associate Nick Matthew.

Exciting Growth Prospects for Zellis

Roy Mackenzie, a partner at Apax, remarked on the acquisition, highlighting Zellis as an "impressive" entity with an ideal blend of innovative products and robust customer relationships. "Zellis's recent technological advancements and strategic market positioning signal promising long-term growth through additional investments and potential mergers," Mackenzie stated.

Zellis, serving approximately a third of the FTSE 100 companies, aims to expand its market reach into the mid to upper-mid sectors. This growth is planned through the introduction of new HR modules for current customers and an expansion of its benefits administration segment.

Apax Funds To Acquire Zellis Group : Final Stages of the Deal

Projected to conclude in the latter half of 2024, the acquisition requires no shareholder nod from Apax Global Alpha, as the transaction is structured through fund investments, highlighting its strategic maneuver within its operational framework. However, the deal awaits final regulatory approval, details of which remain undisclosed.

Following the announcement, Apax shares on the London Stock Exchange, part of the FTSE 250 Index, experienced a rise to 141.4 pence ($1.75), marking a 1.7% increase from the previous day.

Financial advisement for the transaction is provided by Arma Partners and Citigroup for Apax, with Evercore and Morgan Stanley advising Zellis and Bain Capital.

As the deal progresses, Zellis has yet to make a formal comment on the acquisition.

This move follows Apax’s February announcement of its XI Fund's acquisition of WGSN, a consumer trend forecasting firm, from Ascential for £700 million, underscoring its aggressive expansion strategy in the tech and data sectors.