HG Capital Trust Plc - Hg purchases Cinven stake in Visma
HgCapital Trust plc ("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.
The Company will invest approximately £19.5 million in Visma, with other institutional clients of Hg investing alongside the Company through the Hg Saturn Fund, other Hg-managed vehicles, and the Canada Pension Plan Investment Board (CPPIB).
Following completion of this transaction, the Company's holding in Visma will eventually represent, at cost, c.20.5% (or c. £162 million), of the Company's gross assets at 31 March 2019, (directly into Visma and via its holding in Raet, which was acquired by Visma in 2018) resulting in the Company's holding slightly exceeding the published investment policy cap by 0.5%. In discussion with the Manager, the Board has concluded that this change in the published investment policy for the purpose of facilitating the Company's participation is not material and would be likely to promote the success of the Company for the benefit of its shareholders. Furthermore, the Board have identified a number of alternative means to bring this holding within 20% in the short to medium term.
Note that these figures only relate to HgCapital Trust's share of Hg's overall investment in Visma.
Based on the 31 March 2019 NAV, the Company's liquid resources available for future deployment, including all announced transactions and the proposed dividend payable in April 2019, are estimated to be £120 million (15% of the pro-forma 31 March 2019 NAV of £790.7 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 to three years to approximately £386 million.
Hg purchases Cinven stake in Visma
Transaction reinforces Hg's position as Europe's largest software investor, with Visma's Enterprise Value now €6.5 billion
18 April 2019. Hg today announces that Hg Saturn and its investors have agreed to a further c.€640 million equity investment in Visma, a leading provider of business-critical software to private and public enterprises in the Nordic, Benelux and Baltic regions. CPPIB will also make a further investment of c.€110 million in Visma as part of this transaction.
Hg is already the majority owner of Visma, having led the original delisting of Visma from the Oslo Stock Exchange in 2006. Hg has been the lead or co-lead investor in Visma for the last 13 years. Cinven, who first invested in Visma in 2014, sold part of its stake to Hg and co-investors in 2017 and is now selling the entirety of its remaining shareholding in Visma as part of this transaction. The transaction values Visma at an enterprise value of over €6.5 billion.
Hg is Europe's largest investor in private software business and has supported Visma's management to build a world-class company through several stages of growth and innovation since 2006. Most importantly Visma management, backed by Hg, started to invest in cloud and Software-as-a-Service (SaaS) in 2009. This early investment has given Visma a significant competitive advantage, having transitioned, over the last decade, from a largely on-premise software provider to being Europe's largest provider of cloud-delivered SaaS to businesses. Today Visma has over $1billion of SaaS revenues delivered to more than 500,000 customers, with over 70% of Visma's revenues coming from cloud-delivered SaaS products or services.
During Hg's ownership period over the last 13 years, Visma's world-class management team has delivered consistent revenue and profit growth of more than 20% per year, evolving from a business valued at under €450 million in 2006 into one valued at over €6.5 billion today.
Following completion of the transaction, Hg's managed funds will own c.63% of Visma, alongside other significant co-investors including GIC, ICG, Montagu and CPPIB.
Nic Humphries, Senior Partner and Head of the Hg Saturn Fund said:"Working closely with Øystein Moan and his team over the last 13 years has been a pleasure. Quite simply they are a world-class team, and great fun to work with. They have built Europe's leading SMB SaaS business. This is a testament to their technical competence and willingness to invest early and consistently for the long-term in new technologies that, in turn, bring great benefits to their nearly 1 million customers. Hg were able to recognise the potential of SaaS well ahead of most investors because of our longevity and focus on the sector. We are proud to have been by Øystein and Visma's side every step of the way on this exciting journey for the last 13 years and many more in the future."
Øystein Moan, CEO and Chairman of Visma said: "Hg is Europe's largest and most consistent investor in software and SaaS businesses over the last 20 years, having led more software deals than any other private investor in Europe. To have a partner with this background is a significant advantage for any management team and this experience has helped Visma on every step of our growth. They have been, consistently, our largest investor over the last 13 years, demonstrating what long-term support really means. I'm delighted that two world-class investors, Hg and CPPIB, have decided to invest further in the company."
This investment re-enforces Hg's position as Europe's leading software investor. Hg has led over 40 "platform" software investments and more than 200 bolt-on acquisitions, delivering industry-leading investment returns to its investors. Successful software/SaaS investments include: Addison Software, Allocate Software, Computer Software Group, IRIS Software, P&I, RAET, Sequel, Sovos and over 30 others.