TIDMHGT
RNS Number : 5138J
HgCapital Trust PLC
29 June 2017
29 June 2017
HgCapital Trust plc ("the Company") and other institutional
clients of HgCapital will re-invest in Visma Group Holdings
("Visma"), a leading provider of mission-critical business software
to SMBs in the Nordic region, following a decision by KKR to sell
its holding in the group. HgCapital will be the lead investor in
the new transaction structure, alongside Cinven, GIC, Montagu, ICG
and the management team at Visma. This transaction values the
business at a total enterprise value of NOK45 billion (GBP4.2
billion / $5.3 billion).
As part of this transaction, the Company will be realising its
stake via the HgCapital 6 vintage which will return estimated
proceeds of GBP33.7 million to the Company. When combined with the
existing stake in Visma which would be revalued to GBP78.9 million
as a result of this transaction, this represents an uplift of
GBP32.2 million (40%) or 86 pence per share over the carrying value
of GBP80.4 million in the Net Asset Value ("NAV") at 31 May 2017,
which was based on the Directors' valuation as at 31 December 2016.
The Company will contribute a total of GBP13.5 million to the
re-investment in Visma via its commitment to invest alongside
HgCapital 7. This will bring the Company's total investment by
value in Visma to GBP92.4 million, including GBP38.4 million in
co-investment.
The Company, whose shares are listed on the London Stock
Exchange, gives private and institutional investors the opportunity
to participate in all HgCapital's investments.
Following completion, approximately GBP186 million of the GBP200
million commitment made by the Company in 2013 will have been
invested in thirteen companies, alongside the HgCapital 7 Fund. In
December 2016, the Company committed to invest up to GBP350 million
in mid-cap companies, with the HgCapital 8 Fund, over the next four
to five years. In February 2017, the Company committed to invest up
to GBP80 million in smaller-cap companies, with HgCapital's Mercury
2 Fund.
Based on the pro-forma 31 May 2017 reported NAV, (including all
announced transactions and the impact of the revaluation of the
carried interest provision), the pro-forma NAV of the Trust is
expected to be GBP649.2 million (or 1,739.4 pence per share). The
Company's liquid resources available for future deployment,
including all announced transactions, are estimated to be GBP157
million (24% of the pro-forma 31 May 2017 NAV). In addition, the
Company has access to an GBP80 million standby facility, which is
currently undrawn. The transaction will reduce the Company's
outstanding commitments to invest in HgCapital deals over the next
four to five years to approximately GBP461 million.
HgCapital leads $5.3bn buyout of Visma, Europe's largest ever
software buyout
-- HgCapital leads the largest ever European software buyout in
a transaction valued at NOK45bn / GBP4.2bn / $5.3bn
-- HgCapital led the buying investor group and will ultimately
represent 41% of Visma equity as a result of this transaction;
significant minority investors are Cinven, GIC, Montagu and ICG
alongside management who will retain a 7% stake in the business
-- HgCapital led the public-to-private investment in Visma in
2006 and has been a key shareholder for 11 years, increasing its
ownership in both 2014 and now in 2017
29 June 2017: HgCapital has today announced a further investment
into Visma Group Holdings ("Visma"), a leading provider of
business-critical software to SMBs in the Nordic and Benelux
region. HgCapital will invest a further GBP238 million, in addition
to its current holding, valuing the total business at an enterprise
value of NOK45 billion (GBP4.2 billion, US$5.3 billion), making
this the largest ever software buyout in Europe and one of the top
5 globally.
HgCapital will be the lead investor in the new transaction
structure, representing 41% of the equity, alongside GIC,
Singapore's sovereign wealth fund, Montagu and ICG, who will hold
minority stakes. Following this transaction, KKR will have realised
its entire stake in the business, with Cinven separately retaining
a shareholding of c. 17% in Visma. GIC, Montagu and ICG are all
committing direct capital to the business, which continues to
demonstrate the ability of Visma to attract world-class
institutional investor support to help drive the future growth of
the business
This group is collectively acquiring 100% of KKR's stake in
Visma and 40% of Cinven's shareholding as part of their exit
process; investing a total of c. GBP1.4 billion of equity as part
of the transaction. Completion is subject to regulatory
approval.
This transaction values HgCapital 's 2014 investment in Visma at
2.4x original cost / c. 36% gross IRR in NOK, after less than three
years of ownership.
In 2002, HgCapital's TMT team identified regulatory-driven,
subscription-based software as an attractive sub-sector with scope
for considerable growth over the following decade. HgCapital has
made more than twelve investments in the regulatory-driven software
space over the last fifteen years and more than 150 bolt-on
acquisitions over this same period. In total HgCapital has made 37
software TMT investments and over 200 bolt-on software acquisitions
since 2002, making the firm comfortably the most active European
TMT investor over this period.
HgCapital initially invested GBP101 million in Visma in 2006
(through the firm's HgCapital 5 fund), completing a
public-to-private de-listing from the Oslo stock exchange valuing
the business at GBP382m at that time. HgCapital subsequently
continued to hold a stake in the business and supported Visma's
continued growth over the next eight years, before re-investing
again in 2014 (through its HgCapital 7 Fund), alongside both KKR
and Cinven.
Visma gives investors ongoing exposure to a leading provider of
mission critical accounting, resource planning and payroll software
to small and medium-sized enterprises as well as the public sector
in the Nordic region. HgCapital has known Visma and its management
team since 2004 and will continue to support the business going
forward in order to grow revenues both organically and through
acquisitions.
HgCapital will continue to work with Visma's management in the
ongoing transition of the company's software products to Software
as a Service ("SaaS"). Visma is one of the leading SaaS providers
to SMB's and the public sector in Europe, with the potential to
accelerate this growth both through organic investment and further
bolt-on acquisitions.
Visma's performance over the eleven years since 2006 has been
consistently strong, growing both revenues, profit, employee
numbers and research and development investment every year
including throughout the financial crisis, Visma's revenues grew
from NOK1.6 billion in 2006 to NOK7.9 billion in 2016, a compound
annual growth rate of 17%; EBITDA increased from NOK240 million in
2006 to NOK1.9 billion in 2016, (CAGR of 23%). Separately, the
company has also completed more than 120 bolt-on acquisitions over
the same period and improved operating margins from 15% to 25%.
"We have been incredibly fortunate to partner with Øystein Moan,
CEO of Visma, and his exceptional management team over the last 11
years. They and we have an exciting vision for the business which
sees us delivering an ever-increasing number of products and
services to our millions of happy customers" said Nic Humphries,
Senior Partner and Head of the TMT team at HgCapital.
Øystein Moan, CEO of Visma commented "With KKR now realising
their holding after 7 years of investment in Visma, the management
team appreciates our long-term investor HgCapital, increasing their
holding in the business to 41%. KKR have been good owners of Visma
and the company has enjoyed strong growth under their guidance.
With deep sector knowledge, HgCapital has made a significant
contribution to the development of Visma since 2006, and we look
forward to working together towards pan-European expansion and
transformation to a pure cloud computing company together with
Cinven, GIC, Montagu and ICG. This global network and access to
capital will be important when developing and growing Visma over
the coming years."
HgCapital and the buying investor group were advised on this
transaction by Arma Partners, Lazard, Deloitte, Skadden, White
& Case and Bain & Co.
-End-
For further details:
HgCapital
Laura Dixon +44 (0)20 7089 7888
Maitland
Tom Eckersley +44 (0)20 7379 5151
About HgCapital Trust plc
HgCapital Trust plc is an investment trust whose shares are
listed on the London Stock Exchange (ticker: HGT.L). The Company is
a client of HgCapital, giving investors exposure to a portfolio of
high-growth private companies, through a liquid vehicle. New
investments and existing portfolio companies are managed by
HgCapital, an experienced and well-resourced private equity firm
with a long-term track record of delivering superior risk-adjusted
returns for its investors. For further details, please see
www.hgcapitaltrust.com.
Neither the contents of HgCapital Trust's, HgCapital's, Visma's,
Cinven's, GIC's, Montagu's, ICG's or KKR's websites nor the
contents of any website accessible from hyperlinks on the websites
(or any other website) is incorporated into, or forms part of, this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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