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June 13, 2012

Apax, JMI Equity to acquire Paradigm for $1bn

Will allow both the companies to leverage long-term growth trends in oil & gas exploration

By CBR Staff Writer

Private equity company Apax Partners and JMI Equity have agreed to acquire Paradigm, a software vendor focused on oil and gas exploration & production, for about $1bn in cash.

Paradigm, owned by Fox Paine & Company, offers software focused on the delivery of analytical and information management applications for the discovery and extraction of subsurface natural resources.

Paradigm stated its software allows engineers to optimise drilling and production decisions through the analysis of seismic and well-log data across the exploration and production lifecycle.

Paradigm has over 700 clients which include key oil companies in Europe, the Americas, the Middle East, Africa, China and Australasia.

Apax Partners Energy working group head and a senior Partner in London Ian Jones said Paradigm has invested considerable time and money in developing market-leading intellectual property, and employs many of the leading scientists and software engineers in the sector.

"As such, it is well-placed to benefit from strong tailwinds in the coming years as energy companies look to drill in more challenging locations," he added.

"The software it provides is the best in the market, leading to strong, established relationships with its customers and underpinning an attractive business model."

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Apax Partners Tech & Telecom team partner in New York Jason Wright said Paradigm is known as a technologically innovative software company.

"We believe that the intersection between Energy and Software is an exciting area for investment and is an opportunity we have been monitoring for some time," he added.

Fox Paine & Company purchased Paradigm for about $100m in 2002.

Apax has experience in the software and IT space with investments of around $1.7bn of equity in enterprise software sector including companies like Epicor Software Corporation/Activant Solutions, Sophos, The TriZetto Group, RealPage, IntraLinks, Princeton Softech, Planview and Autonomy.

The firm has also invested previously in other technology companies whose growth is driven by the energy sector, including Hansen Transmissions and Q-Cells.

Joining with Apax and JMI, Paradigm plans to further boost its top line and market share growth and capitalise on the opportunities its market position and technologies offer.

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