HgCapital Trust plc Regulatory News (HGT)

19 May 2014

HgCapital Trust plc

HgCapital, the Manager of HgCapital Trust plc ("The Trust"), has announced the sale of Schleich, a leading producer of classic toy figurines based in Germany, to Ardian, the French Private Equity Firm subject to regulatory approval.

The Trust, the listed investment trust which participates in all HgCapital's investments alongside its institutional clients, has realised cash proceeds of approximately £11.8 million on completion of the transaction. This represents an uplift of £4.3 million (58%) over the carrying value of £7.5 million in the Net Asset Value ("NAV") of the Trust at 30 April 2014, which was based on the Directors' valuation as at 31 December 2013.

Based on the 30 April 2014 reported NAV (and after adjusting for the impact of the Visma transaction expected to complete in July) the NAV of the Trust is expected to increase to £435.7 million or 1,167.4 pence per share (an increase of 11.6 pence). The Trust's liquid resources available for future deployment are estimated to be £82.6 million (19% of the 30 April 2014 NAV).

Ardian acquires toy manufacturer Schleich from HgCapital

Schleich achieves turnaround - Ardian's investment allows new management team to focus on future growth strategy

Ardian, the premium independent private investment company, has announced the acquisition of toy manufacturer Schleich from European private equity investor HgCapital. The transaction has been done through Ardian's € 2.4 billion LBO Fund V, which the company closed in October 2013. The management of Schleich has acquired a substantial stake in the company as part of the acquisition, which is subject to antitrust approval.

Founded in 1935, the heritage Schleich brand enjoys a high level of awareness and an excellent reputation with parents and retailers. It is one of Germany's biggest toy manufacturers and a leading international supplier of traditional figurines and realistic 'play world' concepts, which allow children to create their own unique toy landscapes. Today Schleich's famous figurines are sold in more than 50 countries. Originally family-owned, the company was acquired by HgCapital in December 2006. Since then, sales have grown from € 61 million to € 106 million, with the number of employees increasing from approximately 190 to 340 today. The company has achieved these milestones by penetrating new markets, including the US, and launching successful new product ranges, such as Bayala elves.

After a period of stagnation in 2011 and 2012, a change in management was implemented in 2013, and the company returned to a path of sustainable growth with the support of HgCapital. Under the leadership of Dr. Thomas van Kaldenkerken (appointed in January 2013), a proven consumer goods and marketing expert, the company has developed new product ranges in the play world and accessories area. These initiatives have been based on the results of extensive market research and consultations with Schleich's newly founded distributor's board. Since beginning of 2014 these products have been gradually introduced to the market, taking the company to a new level of its development.

In 2013, Schleich had already benefitted from the measures initiated by the new management team and achieved a 7% growth in sales while increasing its profitability compared with the previous year. Advance sales from the new product ranges in the first part of 2014 have already exceeded the high targets set by the management, validating Schleich's new strategy.

Dr. Thomas van Kaldenkerken, CEO of Schleich, emphasizes: "Since the beginning of 2013, we have not only managed the turnaround of our existing core business but have also set the course for further significant growth, which is already producing strong results. This has also been achieved with the proactive and professional support of HgCapital. With children we develop real toys for children. With our innovations, which continue to provide a platform for children's fantasy, the figurines and play worlds from Schleich will continue to inspire children, parents and grandparents."

Justin von Simson, Partner at HgCapital, says: "For HgCapital, Schleich was a successful investment and it was a pleasure working together with the current management team to help develop Schleich's international presence, distribution and logistics capability and its profitability. We identified a strong and experienced new leadership team for the company, jointly developed a new, robust, strategy for the future and thus positioned the company for its next phase of growth. We are delighted to have found in Ardian the ideal future partner for Schleich."

Caspar von Meibom, Managing Director at Ardian, adds: "For me as a father, Schleich with its timeless toy figurines, represents much more than just an investment in a company. With its new strategy of increasingly expanding into play worlds as well as further penetrating both international markets and new distribution channels, we see significant additional growth potential for the company. We are impressed by the implementation achieved to date of the outstanding management team and look forward to working alongside them to support the company over many years to come. We would also like to thank HgCapital for developing Schleich in a sustainable way and for its fair and reliable conduct in an efficient bilateral transaction process."

Dr. van Kaldenkerken added: "We were impressed by Ardian's extensive industry knowledge and are confident that their team will prove to be a creative and highly engaged new partner. Ardian's investment approach of long-term support for growth companies with sector know-how and financial resources, fits perfectly with our new corporate strategy and with the significant future potential of the Schleich brand."

- Ends -

For further details:

HgCapital

Stephen Bough

+44 (0)20 7089 7888

HgCapital Trust

Roger Mountford

+44 (0) 7799662601

Maitland

Peter Ogden

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 Trust 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's, HgCapital Trust's, Schleichs, nor Ardian'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.