HgCapital Trust plc Regulatory News (HGT)

HgCapital Trust plc

21 May 2015

HgCapital, the Manager of HgCapital Trust plc ("The Trust"), today announces a majority investment in The Foundry Visionmongers Ltd ("The Foundry"), a leading provider of award-winning software used globally by creative professionals.

HgCapital Trust plc will invest in The Foundry, based in London, alongside other institutional clients of HgCapital, who will participate through the HgCapital 7 Fund. The Trust, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital's investments. The Trust will contribute a total of approximately £19.7 million.

The acquisition of The Foundry represents the fifth investment by the HgCapital 7 Fund, and following completion, the Fund will be approximately 41% invested.

Based on the 30 April 2015 reported NAV (including all announced transactions and dividend payment) the Trust's liquid resources available for future deployment are estimated to be £22.3 million (5% of the 30 April 2015 NAV, excluding a £40 million standby facility). The transaction will reduce the Trust's outstanding commitments to invest in HgCapital deals to approximately £166 million (37% of the 30 April 2015 NAV).

HgCapital has known the company for several years and this investment is in line with HgCapital's proven sector-focused approach of investing in leading global providers of vertical market application software. The Foundry shares many of the characteristics that HgCapital looks for, providing an excellent platform for growth across a diversified client base and a commitment to innovation.

HgCapital will work closely with the management team to help the business accelerate its high rate of organic growth, in particular the ongoing development of disruptive technologies driving creative control and production efficiency. HgCapital will also work with The Foundry to potentially engage in value accretive M&A to support the business and its management in building a global software champion.

The Foundry is the fourth investment by HgCapital funds in the European software sector in the past year, following the acquisitions of Sequel, Allocate Software and Eucon.

The Foundry Kicks off Next Growth Phase With New Majority Owner

HgCapital Share Company's Vision to Deliver Disruptive Technologies to Creative Industries

The Foundry, a leading provider of award-winning creative software, announced a majority investment from HgCapital, one of the UK's most prestigious private equity firms. Comprising experts from technology and business sectors, HgCapital are perceived as one of the top investors in European software. The Foundry will sit within the Technology, Media & Telecommunications ("TMT") sector of HgCapital. Under the terms of the deal, HgCapital will assume majority ownership from The Carlyle Group for an enterprise value of £200 million ($312 million USD).

"Knowing the direction we plan to take The Foundry, we identified that HgCapital was the ideal partner to build on what The Carlyle Group have helped us achieve," said Bill Collis, chief executive officer, The Foundry. "Nic and his team have such deep software experience, take a long term view on investing and have an amazing track record in taking already solid companies to even greater levels of success. HgCapital achieve this through investment, both in R&D and people, with a deep respect for customer loyalty and satisfaction."

"With this deal, we remain one of the few independent companies solely focused on creative industries. This lets us pursue our best-in-class strategy, prioritizing research and innovation; and teaming with other companies to create powerful collective solutions."

"There are so many elements about The Foundry that we find attractive, not the least of which is the core management team," said Nic Humphries, managing partner of HgCapital and the head of the TMT team. "This is a company that constantly innovates, both in terms of their technology, as well as their business. Bill and his team love nothing more than running head on into the challenges facing creative industries, developing exciting disruptive technologies that have huge potential."

The Foundry's development philosophy centres on the needs of the artists, designers and storytellers identified through our incredibly collaborative customer relationships. Solutions, whether built from the ground up, acquired or developed with partners, will always focus on today's business challenges and future opportunities.

This will leverage our world-class experience in visual effects, design and games. It continues our leadership in emerging trends around collaborative ideation, the automation of creativity, concurrent marketing and manufacturing, as well as new behaviours in storytelling, media collaboration, creation and consumption, such as VR and AR.

For more information on The Foundry, please click here.

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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 or The Foundry'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.