HgCapital Trust plc Regulatory News (HGT)

Hg, the Manager of HgCapital Trust plc ("the Company"), today announces an investment in Personal & Informatik AG ("P&I"), a leading provider of cloud-based HR software, headquartered in Germany, acquiring the holding from funds advised by Permira, the global private equity firm, for an enterprise value of €2 billion. Permira funds remain invested in P&I with a substantial minority stake. The transaction will represent the 4th investment from the Hg Saturn 1 Fund, which had its first close in early 2018 and focuses on software businesses with enterprise values of more than £1 billion. Hg managed funds will become the majority shareholder in the business.

Terms of the transactions are not disclosed.

HgCapital Trust plc will invest approximately £37.7 million in P&I, with other institutional clients of Hg investing alongside the Company through the Hg Saturn 1 Fund.

The Company, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

Note that these figures only relate to HgCapital Trust's share of Hg's overall investment in P&I.

Based on the 30 September 2019 NAV, (including all announced transactions and the proceeds from the issues of equity in November 2019 and December 2019), following completion of this transaction the pro-forma NAV of the Trust is expected to be £1,023.2 million (or 251.8 pence per share). This transaction would value the Company's existing investment in P&I through the Hg Genesis 7 Fund and associated co-investment at £20.0 million.

The Company's liquid resources available for future deployment (including all announced transactions, the interim dividend paid on 25 October 2019 and the issues of equity in November 2019 and December 2019) are estimated to be £125 million (12% of the pro-forma NAV of £1,023.2 million). In addition, the Company has access to an £80 million standby facility, which is currently undrawn. The investment will reduce the Company's outstanding commitments to invest in Hg transactions over the next two years to approximately £269 million.

Hg Saturn Fund acquires cloud-based HR software provider P&I from Permira funds

23 December 2019 - Hg, Europe's leading software investor, today announces an investment in Personal & Informatik AG ("P&I"), a leading provider of cloud-based HR software, headquartered in Germany, acquiring the holding from funds advised by Permira, the global private equity firm, for an enterprise value of €2 billion. Permira funds remain invested in P&I with a substantial minority stake. The transaction will represent the 4th investment from the Hg Saturn 1 Fund, which had its first close in early 2018 and focuses on software businesses with enterprise values of more than £1 billion. Hg managed funds will become the majority shareholder in the business. 

Hg is a serial investor in the regulatory driven software space and continues to see attractive, long-term growth for leading and innovative players in the sector. P&I represents the 6th company focused on HR software in Hg's current portfolio, alongside Visma, IRIS, Access Group, Citation Group and Allocate Software. These 6 HR software companies currently total over €14 billion of enterprise value within the wider Hg portfolio of 33 software and services companies.

The Permira funds have a long track record of successfully investing in technology companies around the world and have deployed around €10 billion in the sector since 1997. Current portfolio companies in that sector include TeamViewer, Informatica, Klarna, Genesys, LegalZoom and Allegro, amongst others.

Founded in 1968, P&I is an internationally operating, full suite provider of cloud-based HR software solutions and a driver of innovation in HR technology. P&I's scalable subscription-based platform exhibits characteristics that resonate with Hg Saturn's core focus, with a broad, diversified and loyal customer base, and has delivered exceptional historical operating performance, with over 10 years of consistent revenue and EBITDA growth. The company has significantly extended its R&D capabilities over the past few years, which includes the opening of a new R&D hub in Greece in 2017. As a result, P&I developed and successfully introduced an integrated Software-as-a-Service (SaaS) platform allowing HR tasks to be managed in the most modern, efficient and fastest manner, delivering strong value to its customers and a truly differentiated experience to its users. P&I's new sales force structure has grown its customer base to more than 15,000 end customers, ranging from small- and medium-sized private businesses (SMB) to large enterprises and public sector organizations of all sizes, mainly in Germany, Switzerland and Austria (DACH region).

Justin von Simson, Managing Partner at Hg, commented: "P&I is an exceptional business and we've been in the privileged position of knowing the team there for almost two decades. Since our first investment in P&I in 2013 we remain impressed by the quality and long-term vision of the business and its management team. We're excited to partner with P&I and its team again and support them in the next phase of growth."

Michael Biehl, Director in Hg Saturn, and Carlo Pohlhausen, Principal at Hg, said: "HR software is a core sector for us at Hg and P&I is one of the European leaders in this field, enabling thousands of customers to simplify and automate HR tasks through its innovative cloud technology. We're delighted to support the business on its path of becoming a true European HR cloud champion."

Vasilios Triadis, CEO P&I, added: "We believe that, together with our well-known partner Hg, we will be well positioned to write the next chapter of P&I's success story. The Hg team with its extensive knowledge of P&I and the software sector is the perfect partner to back us on our future growth trajectory. At the same time we want to thank the Permira funds for their support in further strengthening our leadership position in the European HR software market. We are very happy about their continuous commitment which shows a strong confidence in our growth plans."

Jörg Rockenhäuser, Partner and Head of DACH at Permira said: "Following the recent listing of TeamViewer in Germany, the sale of P&I marks another successful software transaction for Permira, Europe's leading technology investor. Over the past years, the Permira funds have supported the P&I management in expanding the business across the German-speaking region and in significantly investing in R&D and product innovation. The Permira funds continue to see huge growth potential in P&I and remain invested with a substantial minority stake."

Stefan Dziarski, Partner at Permira, commented: "With the launch of the new Software as a Service product, P&I has been transformed into one of the most innovative subscription-based SaaS platforms in the Human Resources segment. Today, the company is a technology leader in the HR software market and is ideally positioned for future growth in Europe." 

For further details:

Hg

Laura Dixon +44 (0)20 7089 7888

Brunswick

Alice Gibb and Sam Chiene +44 (0)207 404 5959

About HgCapital Trust plc

HgCapital Trust plc, whose shares are listed on the London Stock Exchange (ticker: HGT.L), gives investors exposure through a liquid vehicle to a portfolio of high-growth private companies in the software and services sector. The selection of new investments and creation of value in these businesses are managed by Hg, 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.

The contents of the Hg, HgCapital Trust, Permira and P&I's websites are not incorporated into, and do not form part of, this announcement.