TIDMHGT
RNS Number : 1174D
HgCapital Trust PLC
19 June 2023
Hg, the Manager of HgCapital Trust plc ("HGT"), today announces
that it has agreed to a part realisation of its investment in Azets
Group, a leading provider of business-critical accounting, tax,
payroll, audit and advisory services to SMEs.
PAI Partners has joined the business as a new investor.
Following completion, PAI will hold an equal and co-controlling
stake in Azets alongside current owners Hg.
Terms of the transaction are not disclosed and completion is
subject to customary regulatory approvals.
HGT, whose shares are listed on the London Stock Exchange, gives
private and institutional investors the opportunity to participate
in all Hg's investments.
The transaction values HGT's investment in Azets at
approximately GBP54.3 million. This would represent an uplift of
GBP7.5 million (16% or 1.6 pence per share) over the carrying value
of GBP46.8 million in the Net Asset Value ("NAV") of HGT at 31
March 2023.
Note that these figures only relate to HgCapital Trust's share
of Hg's overall investment in Azets.
Based on the 31 March 2023 reported NAV, the pro-forma NAV of
the Trust is expected to be GBP2.2 billion (or 472.0 pence per
share). HGT's available liquid resources, which includes the
undrawn bank facility of GBP350 million for future deployment
(including all announced transactions and the final dividend paid
in May) are estimated to be GBP654 million (30% of the pro-forma 31
March 2023 NAV).
Azets Group secures investment from PAI Partners
to join Hg and support next phase of growth
Azets Group ("the Group"), a leading provider of
business-critical accounting, tax, payroll, audit and advisory
services to SMEs, has announced today that PAI Partners ("PAI"), a
pre-eminent private equity firm, has joined the business as a new
investor. Following completion, PAI will hold an equal and
co-controlling stake in Azets alongside current owners Hg, a
leading investor in European and transatlantic software and
services businesses.
Azets was formed by Hg six years ago, in response to the growing
digitalisation of financial compliance processes for SMEs. Since
then, the Group has grown significantly to become one of the
largest tech-enabled providers of professional advisory, financial
and accounting services to SMEs globally.
Azets continues to benefit from the broader trend of SMEs
outsourcing non-core and non-discretionary services, as well as the
highly fragmented nature of the sector. The business has acquired
more than 90 local providers since inception. Today, Azets' 7,600
professionals support over 93,000 clients and generate revenues of
approximately GBP700 million.
Azets is now backed by two leading private equity investors:
PAI, with its deep sector expertise in Business Services, and Hg,
with its longstanding heritage in software and services investing.
Both investors have a strong track record of partnering with
management teams to rapidly scale businesses and create global
industry leaders.
With this support, Azets is well placed to continue its
successful growth strategy, deepening its presence in new and
existing markets across Europe through a combination of organic
growth and further strategic M&A.
Chris Horne, Group Chief Executive Officer at Azets, said:
"Azets has established a strong reputation for delivering
innovative tech-enabled services in what has previously been a
low-tech adoption sector. Our five-year Pathway strategy outlines a
clear purpose and vision of how we want our business to develop,
and we are thrilled to have selected two investors who are as
excited about our future as we are. To gain backing from another
world-class investor is testament to this evolution and will enable
us to deliver on future opportunities that will help us scale and
support our thousands of clients and colleagues globally."
Colm O'Sullivan, a Partner at PAI Partners, said: "With its
proven and resilient business model, Azets provides a strong
platform for future growth. Thanks to its leading market
positioning, the firm is well placed to benefit from the growing
levels of compliance, regulation and outsourcing that underpin its
core services market. We look forward to partnering with the
management team and Hg in this next phase of Azets' growth."
Matthew Brockman, Managing Partner at Hg, said: "We are
delighted to have reached this milestone with Azets. From the
original vision, we have built a world-class company using our deep
knowledge of this sector and considerable operational capabilities
in building software and services companies. This transaction
allows us to return significant capital to our investors, a huge
priority for us in the last year, while bringing on substantial new
expertise from a strong partner and retaining a substantial
interest in the next leg of growth for Azets."
Completion is subject to customary regulatory approvals.
Hg and Azets management were advised by JP Morgan as lead
adviser, Jefferies, Alpha Advisory, Skadden, EY, Deloitte and
OC&C. PAI Partners was advised by Deutsche Bank, Freshfields,
KPMG, Alvarez & Marsal and Bain & Company.
For further details:
Hg
+44 (0)208 148
Tom Eckersley 5401
HGT
+44 (0)20 8396
Laura Dixon 0930
Brunswick
+44 (0)207 404
Azadeh Varzi 5959
Hg@brunswickgroup.com
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, Azets and PAI websites
are not incorporated into, and do not form part of, this
announcement.
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