HgCapital Trust plc Regulatory News (HGT)

HgCapital Trust plc 

The acquisition, subject to regulatory approval, of a majority stake in Manx Telecom by HgCapital on behalf of its clients has been announced today. HgCapital manages the investment portfolio of HgCapital Trust plc alongside those of other institutional clients. The Trust, which is a listed investment trust giving private and institutional investors the opportunity to participate in all HgCapital's investments, will contribute approximately £11 million which represents 15% of HgCapital's total investment.

HgCapital acquires majority stake in Manx Telecom

London, 4 June 2010: HgCapital, the European sector focused private equity investor, is pleased to announce that it has today acquired a majority stake in Manx Telecom, the Isle of Man's largest telecommunications and internet provider.

The total enterprise value of the transaction is £158.8 million and the acquisition is being completed alongside CPS Partners, a specialist international telecommunications management company. The acquisition is expected to be completed by the end of June 2010 subject to local regulatory clearance.

Manx Telecom is a wholly owned subsidiary of Telefónica and offers the full range of fixed line, mobile and data services to consumers and businesses. It has a successful track record in achieving major industry breakthroughs - it was the first company in Europe to launch a live 3G service and also launched Europe's first commercial High Speed Downlink Packet Access (HSDPA) service. Manx Telecom continues to support the Isle of Man Government's e-business strategy of developing a world-class telecommunications infrastructure to attract companies and investment to the island. The company employs 300 people and reported revenues of £69 million, with EBITDA of £25 million, in the year ended 31 December 2009.

Commenting on the investment, Alex King, Head of TMT at HgCapital, who led the transaction, stated: "While economies across Europe continue to be in a state of flux, the Isle of Man has proved an excellent base for companies, boasting over 25 years of unbroken GDP growth. It has a diversified economy coupled with an educated and skilled workforce. Furthermore, the Isle of Man has invested heavily in electronic services, for which the island has achieved a global reputation.

"Manx Telecom has a superb record of sustainable organic growth. The company also has an excellent management team to whom we will provide our full backing in taking the business forward. We see this as very much a growth investment for HgCapital and will continue to invest in supporting the organic growth of the business and in the form of bolt on acquisitions. This is another investment consistent with our strategy of backing resilient growth companies."

Simon Cunningham, Partner at CPS added: "This is the first collaboration between CPS and HgCapital and we are delighted to be involved. Both companies enjoy best in class reputations based on a long track record of investment and operational success, it is a great combination. We look forward to working with Chris Hall, Manx Telecom Managing Director and all his team in continuing the development and success of the company."

Chris Hall, Managing Director at Manx Telecom, said, "We are delighted that HgCapital and CPS Partners have chosen to make this significant investment in Manx Telecom, and in the Manx economy. This is a huge endorsement of our track record in building a world class company, and a vote of confidence in the future of the business. We are extremely excited to have the opportunity to work with such professional and dynamic partners, each of whom have the skills and experience required to ensure that we can continue to develop the Isle of Man's class leading telecoms infrastructure, and help us to maximise the potential of our global off-Island business."

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For further details:

About HgCapital

HgCapital is a sector focused private equity investor in the European mid-market. We focus on investments with an enterprise value in the range of £50-£500 million. Our business model combines sector specialisation with dedicated, pro-active support to our portfolio companies as well as the corresponding management expertise across all phases of the investment process.

HgCapital manages £3 billion for some of the world's leading institutional and private investors.

For further details, see www.hgcapital.com

About HgCapital Trust plc

HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange. The trust gives investors exposure to a portfolio of high-growth private companies, through a liquid vehicle. This portfolio is 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. The Trust has won the Investment Week Private Equity Investment Trust of the Year every year since 2005.

For further details, see www.hgcapitaltrust.com

About Telefonica / Telefonica Europe

Telefónica is one of the world's largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, with broadband as the key tool for the development of both. It has a significant presence in 25 countries and a global customer base of 273 million. Telefónica's growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America. Telefónica is a 100% private sector company with its shares listed in Madrid and other stock exchanges and more than 1.5 million individual shareholders.

About CPS Partners

CPS Partners is a telecommunications management company founded in 2006, consisting of a team of highly experienced telecommunications executives. Its two partners collectively have 30 years of international telecommunications experience, managing both incumbents and competitive new entrants. The business has a strong focus on island and small country telco's, including previous responsibilities for telecommunications businesses in Guernsey, Monaco, Bahrain, Bermuda, Barbados, the Maldives, the Seychelles and Macau. CPS Partners acts jointly with private equity firms or other investors active in the telecommunications sector.