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(Revised from original 2004 version)
Apax Partners and Xerium S.A.
In 2002, Apax Partners had to decide whether to accept a less-than-perfect offer for one of its portfolio companies or to refinance it. This company, a maker of paper industry consumables with a global presence, had been purchased in 1999 and performed extremely well since then. Despite being a solid, cash-generative operation, it didn't excite a lot of interest in the market. An early exit at a good multiple would be helpful for Apax's current fund and future fund-raising efforts, whereas refinancing would allow Apax to take some money off the table and share in future upsides. Which is the better choice?
Keywords: Leveraged Buyouts;
Globalized Markets and Industries;
Business Exit or Shutdown;
Borrowing and Debt;
Pulp and Paper Industry;
Lerner, Josh, G. Felda Hardymon, and Ann Leamon. "Apax Partners and Xerium S.A." Harvard Business School Case 804-084, September 2006. (Revised from original February 2004 version.)