(Alliance News) - HgCapital Trust PLC on Wednesday said specialist insurance intermediaries A-Plan Group has been sold to international insurance broking group Howden, separately adding it will invest around GBP22 million in Citation Group.
HgCapital Trust is a listed vehicle for investing in unquoted software and service businesses managed by Hg.
The FTSE 250-listed company said A-Plan has more than doubled its revenues under Hg's ownership from 2015, adding that the broker now has 1.3 million policies compared with 600,000 at acquisition.
HgCapital said the transaction with Howden values its current investment in APG at GBP21.5 million, representing an uplift of GBP3.2 million over the carrying value of GBP18.3 million in the net asset value of the company at August 31. Following completion, the pro-forma NAV of the trust is expected to be GBP1.16 billion or 282.9 pence per share.
"We have had a great journey with Hg, together building on a long-term track record of sustainable growth that we are very proud of. We are delighted by the prospect of working with Howden; it's a business that is so evidently aligned with us on the central importance of looking after its people, clients and insurers but will also support us in M&A as we deliver on Howden's ambition for UK regional insurance distribution," said A-Plan Chief Executive Carl Shuker.
Separately, HgCapital said it will invest GBP22.0 million in Citation Group, a provider of tech-enabled, subscription-based HR and employment law, Health & Safety, and ISO services to small and medium-sized enterprises.
Hg first invested in Citation in 2016. In August this year, HgCapital sold Citation to global investment firm KKR, and KKR provided Hg with an option to reinvest in the next phase of Citation's growth. Hg has now exercised that option to re-invest and partner with KKR by acquiring a co-controlling stake in Citation.
"Citation is very simply a high-quality business, demonstrated by around 20 years of year-on-year growth. Our experience of the business and its sector means that we recognise further opportunities for transformational growth, and we're excited to make this new investment in the business," said Nick Jordan and Joris Van Gool, partners at Hg.
No financial details of either of the transactions were disclosed
Shares in HgCapital Trust were trading 3.7% higher at 284.60 pence each on Wednesday morning in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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HgCapital Trust plc (HGT)