Hmm. First off there's a bias in the title of this post; "Why Search Engine Strategies and Incisive Media sold to Apax Partners". Sure, Incisive own Search Engine Strategies but SES is such a small part of Incisive that it's doubtful the brand played any significant role in the decision.
Danny Sullivan's decision to leave Incisive might have been because he knew of the sell out, though, then again, perhaps he didn't and now regrets it.
There's an article on the sellout, from public to private, in Oct 12th's issue of Marketing Week (not always my favourite mag given their mis-quote of us) which sums up the issue;
The advertising and event-driven business model of Incisive has limited its ability to raise significant levels of debt finance as a listed company, and equity-finance transactions have been difficult to justify given valuation ratings within the sector.You can see why I nearly did Economics at Uni rather than my Computing degrees. What a lot of jargon (not that SEO ever uses jargon). In short - it was too expensive to borrow money. Incisive couldn't drive their offerings forward.
Would you lend money to fund an SES? If the answer is yes then you're almost certainly American or Canadian. SES seems less healthy on this (Europe's) side of the Atlantic. A number of the planned, smaller, specialist SES forums this year have been canceled due to a "lack of interest". There might have been a lack of interest but that's compounded by a lack of advertising... which comes back to cash.
I'm hopeful that Apax -> Incisive -> SES conferences can make the vertical model work. It'll take the SEO industry and mature it into many different models. The SEM agency I work for is large enough to use the vertical model (ie, travel specialists, finance specialists, etc) and so goes Google. I think the model has legs.