HgCapital Trust plc Regulatory News (HGT)

HgCapital has agreed to acquire a majority stake in Teufel Speakers GmbH on behalf of clients, including HgCapital Trust plc. 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 £8.8 million, representing 15% of HgCapital's total investment.

HgCapital acquires leading German loudspeaker manufacturer Teufel

London, 30 June 2010: HgCapital, the European sector focused private equity investor has today agreed to acquire Teufel Speakers GmbH ("Teufel") from US private equity firm Riverside. The acquisition is subject to regulatory approval.

Teufel, a leading designer and online retailer of loudspeaker systems in Germany, designs, markets and sells its own brand audio speaker systems (home theatre, multimedia, integrated systems) directly through its business-to-consumer internet platform, teufelaudio.com. Based in Berlin with 72 employees, the business is focused on the mid-to-high-end segment of the market. Teufel recently expanded its product portfolio and has begun to sell into other European countries, including the UK. Teufel is operating in a market growing at 15%+ p.a., as a result of increasing household loudspeaker penetration and customer preference for online shopping, and since 2006, the Company has more than doubled revenue and earnings. The company is uniquely positioned in the value chain as it has no offline retail channel and production is outsourced. This allows Teufel to sell at lower prices than its competitors and at the same time achieve superior margins.

This announcement represents HgCapital's second transaction in the German market in 2010, following the acquisition of SimonsVoss Technologies AG in May. The management board of Teufel supports the transaction, recognising HgCapital's strong track record with similar businesses and its in-depth understanding of the online retail arena. Management will maintain a significant stake in the business.

Commenting on the investment, Thorsten Reuber, CEO of Teufel said:

"The past decade has been an exciting time in the company's history as the business has evolved into one of Europe's leading vendors of high quality audio speaker systems. We are now looking forward to working with HgCapital. HgCapital also has a reputation for adding value right across the supply chain and we have a fantastic opportunity to further diversify and extend our business under their stewardship."

Justin von Simson, HgCapital said:

"Teufel has used its technological expertise and online infrastructure to give it a unique competitive edge. Teufel's business model is based on a high quality, attractively priced product offering with strong distribution and an outsourced production, which will provide an excellent platform to drive future growth. We look forward to working alongside management to realise the company's full potential and to bringing our experience from other portfolio companies with a similar business model to the business."

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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