Q-Cells sale makes €280m for Apax as tech rises again

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The Independent Online

Apax Partners, a London and New York-based private equity and venture capital firm, has made a 27-fold return on its 22-month investment in the German solar power cell company Q-Cells, after selling all but 0.5 per cent of its stake in the business at €68 per share.

Apax's return, €280m (£190m) after costs and net of its original investment, is the largest single capital gain made by a European venture capital firm since the dot.com boom. It beats the $300m (£170m) return Index Ventures made on the $4.1bn sale of Skype to eBay in September.

The return made by Apax also shows the renewed investor interest in technology, particularly technology with an environmental bent. Q-Cells is the world's largest quoted solar power cell company, with a market capitalisation of €3.1bn.

Apax originally invested €11.5m in the company in a third round of venture funding in March 2004.

The company subsequently raised €313m by floating on the Frankfurt Stock Exchange in October 2004, in an initial public offering that was 40 times oversubscribed.

Apax sold 10 per cent of its stake at the IPO, giving it an initial 16 times return on its investment.

Christian Reitberger, a partner in the Munich office of Apax Partners, who led the investment in Q-Cells, said: "The solar cell and associated technologies sector is booming and is providing long-term growth rates of about 25 per cent.

"Selling this stake was suggested to us by the company and investors in order to reduce the stock's volatility, and for us it provided an easy exit."

Q-Cells has recently been given a boost by plans announced by the California state government to invest $3bn into creating three gigawatts of energy from renewable solar energy over the next 10 years.

"These plans were well-known in the industry," Mr Reitberger said, "but they seem to have come as a complete surprise to the mutual fund industry, where most of the demand for Q-Cells shares has come from."

As part of the floatation Apax had agreed to a lock-up period which was not due to end until April, unless an early sale was agreed by the investment banks Citigroup and Dresdner Kleinwort Wasserstein.

Both banks agreed to waive the lock-in period and led the sale to institutional investors, including the fund management group Fidelity.

The Frankfurt market is home to most of the large European renewable energy stocks, as the country has been at the forefront of research into the sector.

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