Target Information

Epiris is pleased to announce that its portfolio company, AXIO Group, has reached an agreement to sell RISI, a leading information provider in the global forest products industry, to Euromoney Institutional Investor PLC for $125 million. This transaction, which is pending regulatory approval, marks the sixth significant exit from AXIO’s portfolio and is anticipated to be finalized in the second quarter of 2017.

RISI is recognized as the most authoritative global source for forest products information. The company provides comprehensive and up-to-date intelligence and data on supply, demand, pricing, and costs across various sectors, including pulp and paper, wood products, timber, tissue, and nonwovens. Its crucial price indices significantly influence the daily operations and trading activities of many companies involved in paper, board, packaging, and other forest product sectors. Headquartered in Bedford, Massachusetts, RISI employs approximately 150 personnel across the United States, China, Belgium, Finland, and Brazil.

Industry Overview

The forest products industry plays a vital role in the global economy, responding to the growing demand for sustainable resources and renewable materials. With increasing environmental awareness, there has been a shift towards sustainable forestry practices, which have elevated the need for accurate and reliable information within this sector. This demand has created fertile ground for companies like RISI, who offer critical insights into market trends and pricing.

In the United States, the forest products industry is supported by a mix of traditional manufacturing and modern technologies. This includes advancements in wood processing and new applications for timber and non-timber forest products. The rise of technology has also encouraged innovation within the sector, leading to new product developments and improved efficiencies.

Internationally, the industry benefits from globalization, with a robust supply chain that connects producers and consumers across continents. This interconnectedness has opened up new markets and revenue streams for firms that can adapt to varied regional demands and regulations, emphasizing the importance of having reliable data on global market activities.

As countries begin to implement stricter environmental policies and regulations, it is likely that companies providing timely and actionable intelligence, such as RISI, will become increasingly indispensable. The continued emphasis on sustainable sourcing is expected to fuel further growth in this sector, highlighting the strategic importance of accurate market data.

Rationale Behind the Deal

The sale of RISI represents a significant opportunity for AXIO Group to realize the value generated from its investments, particularly following a period of substantial growth and operational improvement. Since AXIO’s investment in RISI, the company has demonstrated a remarkable profit growth rate of 15% per year, positioning it as a market leader ready for expansion. The partnership with Euromoney is expected to enhance RISI’s capabilities further, enabling it to capitalize on the growing demand for price reporting in the forest products marketplace.

This transaction also underscores AXIO's successful strategy of enhancing critical businesses, resulting in a favorable outcome for its investors, specifically Electra Private Equity PLC. By achieving a cash return of 4.6x the original investment, this sale exemplifies the value-added approach taken by AXIO in managing its portfolio.

Investor Information

Epiris, the managing entity behind AXIO Group, is a top-decile private equity fund manager with a rich history of investment in diverse sectors. With over four decades of experience managing private equity funds, including those for Electra Private Equity PLC, Epiris has successfully executed more than 200 transactions, investing over £5 billion. The firm boasts a strong track record of generating substantial returns, with a gross IRR of 38% from buyouts and co-investments since 2011.

As of September 30, 2016, Epiris managed funds totaling £2.4 billion, continuing to show robust performance in a competitive investment landscape. The team comprising Alex Fortescue, Alex Cooper-Evans, and Sarah Williams has been instrumental in driving AXIO Group's success, demonstrating expertise in transforming investments into high-growth entities.

View of Dealert

The sale of RISI to Euromoney appears to be a strategically sound move for both parties involved. For AXIO Group, it reflects the culmination of extensive efforts to enhance the company's market position and profitability. The successful execution of this exit will likely bolster investor confidence in the AXIO portfolio management strategy, which has already yielded significant returns.

Furthermore, Euromoney’s acquisition of RISI positions it well within the Price Reporting Agency market, where data accuracy and reliable insights form the backbone of functional operations. Given the anticipated growth within the forest products sector and the increasing need for market intelligence, this acquisition aligns well with Euromoney's strategic objectives.

Overall, this transaction indicates a fruitful investment opportunity characterized by realized growth, strategic foresight, and a promising market outlook. With RISI now set to expand under Euromoney's umbrella, the potential for continued success in this rapidly evolving industry is substantial, making this deal beneficial for all stakeholders involved.

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