HgCapital Trust plc Regulatory News (HGT)

25 Jul 2007 11:45

HG Capital Trust PLC25 July 2007 HgCapital acquires a majority stake in SLV Group The following is the text of a press release issued by HgCapital, which managesthe investment portfolio of HgCapital Trust plc alongside those of otherinstitutional clients. The Trust, which is a listed investment trust givinginvestors the opportunity to participate in all of HgCapital's investments, willinvest approximately €9 million (£6 million) in SLV Group. • HgCapital continuing the lighting producer's success story • Private equity investor acquires majority stake from company founder Munich/Ubach-Palenberg, July 25, 2007. European private equity investorHgCapital is to become the majority shareholder in SLV Group, one of the fastestgrowing manufacturers of innovative lighting systems in Europe. The company'sfounder and current managing director Franko Neumetzler, who has hitherto heldthe majority of SLV's capital, will retain a significant minority stake in thecompany in the future, with the other members of management also continuing tohold shares. The transaction, which is being executed on the basis of anenterprise value of €320 million, still requires the approval of the GermanFederal Cartel Office and is expected to be closed in roughly one month's time. Comprising the parent company S.L.V. Elektronik GmbH, which is based inUbach-Palenberg near Aachen, as well as subsidiaries and associates in Germany,France, Belgium, Switzerland, Hong Kong and Russia, SLV Group has evolved intoone of the most successful European manufacturers of lighting systems over thepast few years. Between 2004 and 2006, its sales surged by a total of 65% tojust under €73 million, with a further increase to around €90 million projectedfor this year. In fact, revenues are expected to double to almost €150 millionby 2010. With roughly 160 employees in Germany, the company is highly profitableand posted earnings before interest, taxes, depreciation and amortization(EBITDA) of almost €25 million in 2006. Founded in 1979 and achieving growth far in excess of the industry average, theSLV Group owes its ongoing success to the resolute implementation of what is aunique strategy in its sector. This strategy combines the development ofinnovative lighting systems in Germany with the cost advantages derived from theearly relocation of production activities to less expensive foreign countries intandem with highly effective logistics and an efficient multi-channeldistribution system based on strong partnerships. Following the acquisition of a majority stake by HgCapital, SLV's provenstructures and successful business model will be retained. After almost threedecades at the helm, the company's founder Franko Neumetzler will be graduallywithdrawing from day-to-day management between now and the end of the year,handing over the reins to a younger generation. Afterwards, he will not only bea shareholder but also an active adviser to the company. The other key membersof management - Detlef Harms and Toni Stumpf - will retain their positions.Working in conjunction with the management team, HgCapital will drive continuedefforts to develop foreign business and work towards preparing the company for astock market flotation in the medium term. Justin von Simson of HgCapital in Munich commented: "This is the sixthinvestment led by HgCapital's German team. Following the recent acquisition oftoy maker Schleich, the transaction provides further proof of our ability toforge strong growth-oriented partnerships with successful family-owned companiesas well as reflecting the mounting acceptance of private equity as a source offinance for German mid-size enterprises. Over the past few years, SLV hasperformed superbly and we are certain that it is ideally positioned to grow justas quickly and profitably as before in Germany as well as in its present and future international markets. We will be providing SLV's management withcomprehensive support via our extensive resources and expertise and areconvinced that the company will be ready for the capital market in a few years'time." Franko Neumetzler, founder and shareholder/manager of SLV said: "We are verypleased to have found in HgCapital an experienced and strong investor seeking apartnership-based relationship with whom we can continue our company's successstory. With HgCapital by its side, SLV will retain its independence, continue toimplement its business model in an undiluted form and unlock new potential. Inthis way, we have been able to find an answer smoothly and in good time to thedifficult successor problem, which many small and mid-size shareholder-managedcompanies face. In addition, by working with HgCapital we can systematically andresolutely take SLV to the next level of its economic development- with theclear perspective of preparing it for the capital market." HgCapital was advised on this transaction by Sal. Oppenheim (corporate finance),Clifford Chance (legal), PWC (financial due diligence) and Kurt SalmonAssociates (commercial due diligence). SLV was assisted by investment bankDresdner Kleinwort and law firm CMS Hasche Sigle. For more information: HgCapital +49 (0)89 2554955 - 0Justin von Simson SLV Gruppe +49 (0) 2451 4833 - 95Franko Neumetzler HERING SCHUPPENER Consulting +49 (0)69 921874 -76Georg Jakobs About HgCapitalHgCapital is a private-equity investor in the European mid-market. We focus oninvestments with an enterprise value in the range of €50-500 million. Ourbusiness model combines sector specialisation with dedicated, pro-active supportto our portfolio companies as well as the corresponding management expertiseacross all phases of the investment process.HgCapital manages more than €2.7 billion for some of the world's most respectedinstitutional and private investors. Our goal is to achieve outstanding resultsfor our investors, management team and intermediaries. Further information on HgCapital can be found at www.hgcapital.com. About SLVHeadquartered in Ubach-Palenberg in the German state of North Rhine-Westphalia,the SLV Group is one of the leaders in the market for innovative lightingsystems and technical and residential lighting. The Group comprises S.L.V.Elektronik GmbH and the subsidiaries Delta Line & Light GmbH and LichtwerkImmobilien Entwicklungs- und Verwaltungs GmbH and is affiliated with a furtherfive independent international companies. In Germany, the company has 160employees. Established in 1979, it solely supplies specialist retailers as a producer andwholesaler. Its wide range of products encompasses individual lighting systemsfor home and exterior uses as well as full-scale high or low-voltage lightingsystems for store and fair construction. The company's own R+D department workspermanently on new products with selected designers and engineers. These arethen manufactured at facilities and partners in the Far East. Thanks to the carefully planned relocation of production complexes in the FarEast, the restrictive selection of partners and suppliers as well as stringentquality assurance, the company is able to offer high-quality products featuringinnovative designs at reasonable prices. Minimum delivery times are ensured innearly all European countries thanks to favorable transportation links and ahighly efficient logistics center fitted with a high-tech high-bay warehouse atwhich 98% of SLV products are kept in stock at all times.Further information on SLV is available at www.slv.de. This information is provided by RNS The company news service from the London Stock Exchange