HgCapital Trust plc Regulatory News (HGT)

26 April 2017

HgCapital, the Manager of HgCapital Trust plc (the "Company"), has announced that it has agreed the sale of QUNDIS, a leading provider of sub-metering solutions in Europe, to a German investment group around KALORIMETA ("KALO"), a leading service providers for climate-intelligent solutions in the buildings sector, for a total enterprise value of c. €400 million. 

The sale of QUNDIS delivers a c. 3.5x investment multiple and a c. 30% gross IRR over the investment period. HgCapital will also retain a minority position in the combined group.

The Company, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital's investments. The Company will realise cash proceeds of approximately £36.9 million on completion of this transaction. When combined with the retained stake, this represents an uplift of £9.4 million (28%) or 25 pence per share over the carrying value of £33.9 million in the Net Asset Value ("NAV") of the Trust at 31 March 2017 which was based on the Directors' valuation as at 31 December 2016.

Based on the 31 March 2017 reported NAV (including the impact of the revaluation of the carried interest provision and the proposed dividend payable in May 2017), the pro-forma NAV of the Trust is expected to be £614.0 million (or 1,645.1 pence per share). The Company's liquid resources available for future deployment including all announced transactions and the proposed dividend are estimated to be £106 million (17% of the pro-forma 31 March 2017 NAV). In addition, the Company has access to a £80 million standby facility, which is currently undrawn.

HgCapital announces sale of QUNDIS to KALORIMETA

§ Twelfth realisation from HgCapital 6 Fund, delivering a 3.5x investment multiple and 30% IRR

§ HgCapital has returned over £1.2 billion to clients over the last twelve months with seven exits and multiple portfolio refinancings since the Brexit vote

§ Second realisation by HgCapital's Munich team over the last 6 months, delivering an overall investment multiple of 2.7x / gross IRR of 32%. This follows the new investments in Raet and STP completed in 2016

26 April 2017: HgCapital is pleased to announce that it has agreed the sale of QUNDIS, a leading provider of sub-metering solutions in Europe, to a German investment group around KALORIMETA ("KALO"), a leading service providers for climate-intelligent solutions in the buildings sector. Furthermore, HgCapital will retain a minority position in the combined group.

HgCapital initially invested in QUNDIS in May 2012. Headquartered in Germany, QUNDIS was created in 2008 from the merger of QVEDIS (previously part of Siemens) and KUNDO SystemTechnik and currently has more than 250 employees. QUNDIS supplies a comprehensive range of sub-metering and communication devices used to measure, collect and transmit accurate consumption data for heat and water usage at the household unit level, serving the SME independent sub-metering supplier and building technology markets across Europe. QUNDIS' products are sold in over 30 countries, with the largest markets being Germany and Italy.

Key value drivers during HgCapital's investment period have been the consolidation of Qundis' production facilities into a single new state-of-the-art site in 2013, and the development of a highly-advanced gateway and software solutions to offer a comprehensive, market-leading remote read-out solution. Through its technological leadership and reputation as quality leader, QUNDIS has been able to develop further into new customer segments and service offerings on a truly European scale. QUNDIS' growth also continues to benefit from broader market fundamentals such as the mandatory actual consumption-based billing (under the European Energy Directive), which HgCapital identified as a driver when the initial investment was made. Overall, QUNDIS is a great example of tech-enablement transforming a business.

The realisation of QUNDIS represents the twelfth exit from the HgCapital 6 (2009), which has now delivered overall realised returns of 2.3x and a 24% gross IRR. The Fund has returned in cash 120% of the original investment made. The sale follows the successful exit of Zenith announced in January earlier this year, which returned 2.9x / 47% gross IRR, and a number of further realisations from HgCapital 6 are anticipated over the coming months.

The sale of QUNDIS' continues HgCapital's strong 20-year long track record of investing in hidden champions in the German market, across the Industrials, Services and TMT sectors. The Munich-based HgCapital team have seen significant activity over the past twelve months including the exit from P&I announced in September last year (which returned 2.3x / 37% gross IRR), as well as the new investments in Raet and STP.

Justin von Simson, Managing Partner HgCapital, and Head of HgCapital's Munich Office, said: "We are very pleased to have achieved an outstanding result for our clients and furthermore to have identified KALORIMETA group as a strong partner for QUNDIS. We are also excited by the opportunity to continue to work with the existing businesses of the group in the future to build a leading company in the field of intelligent buildings and climate control. We would like to thank the management and employees of QUNDIS for their outstanding work and effort to achieve this outcome".

Dieter Berndt, CEO at QUNDIS commented: "We very much look forward to working within the new partnership, as we see multiple opportunities for further improving and completing our solution offering. It is our strong conviction that the combination will allow both companies to benefit strongly from their respective expertise and enables us to have an even more attractive value proposition for all our customers".

Jan-Christoph Maiwaldt, CEO at KALORIMETA commented "This acquisition is another milestone in the company's digital transformation. My colleague Andreas Göppel and I are very pleased that we have successfully completed the acquisition. We´re now able to offer all parts of the value chain around the subject of smart sub metering and smart building individually or as a full service all over Europe."

HgCapital were advised by Rothschild, Latham and Watkins, Deloitte, and E&Y

- Ends -

For further details:

HgCapital

Laura Dixon +44 (0)20 7089 7888

Maitland

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 Trust's, HgCapital's, QUNDIS', nor KALORIMETA'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.

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