Disposal

11 Jun 2007 07:02

HG Capital Trust PLC11 June 2007 The following is the text of a press release issued by HgCapital, which managesthe investment portfolio of HgCapital Trust plc alongside those of otherinstitutional clients. On completion of the sale of IRIS and CSG, HgCapital Trust plc, a listedinvestment trust giving investors the opportunity to participate in all ofHgCapital's investments, will receive total consideration of approximately £27.8million. The majority of this will be received in cash with approximately 11% ofthe consideration rolled over into a new investment vehicle for the combinedbusinesses. The impact of the realisation on the net asset value of HgCapitalTrust plc would be an increase of approximately 69p per share over thepublished May net asset value, which was issued on Friday 8th June 2007. HgCapital sells IRIS Software and Computer Software Group to Hellman & Friedman in a deal valued at £500 million London, 11th June 2007: HgCapital, the European sector-focused mid-marketprivate equity investor, today announced the sale of IRIS Software ("IRIS"), theUK's leading provider of software to accountancy practices and their customers,and Computer Software Group ("CSG"), the UK's leading provider of software tolegal practices and not-for-profit institutions, to investment funds affiliatedwith Hellman & Friedman, for an enterprise value of £500m. Closing is subject toobtaining certain regulatory clearances. HgCapital will continue as an activeshareholder in the combined business. HgCapital's research-driven sector approach led it to acquire IRIS in July 2004and CSG earlier this year. During its time of ownership, HgCapital has workedclosely with both IRIS and CSG management teams to grow the businesses wellahead of general market growth rates both organically and through acquisition. Under HgCapital's ownership, IRIS has more than doubled employment, with staffnumbers growing from 171 to 368, while a focus on direct sales, improvingcustomer support and developing the product line has resulted in revenue growingfrom £20 million to £45 million and profits from £7.6 million to £18.6 million.The business has also doubled investment in product development, building on itsposition as the leader in its market. IRIS has completed four acquisitions since2004 with the support of HgCapital. HgCapital and Hellman & Friedman recognised that merging these highlycomplementary businesses would create a powerful company, which is the largestprovider of software applications to the UK accounting, legal and not-for-profitcommunities and one of the largest employers in the UK software mid-market IRISand CSG are both recognised as the number one for customer service and productquality in their sectors, and the combined business offers the opportunity toprovide additional products and services across the joint customer base. Since 2003 HgCapital has completed 5 original buyouts and 6 major bolt-onacquisitions in the SME software sector with a total deal value of £800 million(€1.2 billion). UBS Investment Bank acted as financial adviser to HgCapital and othershareholders. Nic Humphries, Head of TMT at HgCapital commented: "The success of our investments in IRIS and CSG demonstrates the strength ofHgCapital's research-led sector strategy. From 2003 we conducted substantialtop-down research to identify the potential of subscription-based SME softwarebusiness models as a core target area ahead of the market. Our ownership of IRISthen gave us a platform to identify complementary investment opportunities, andCSG was a perfect fit, offering a similar business model, a complementarycustomer base and a complementary management team. "We are delighted to work with Hellman and Friedman to further grow the combinedbusiness which, under our ownership, has already established itself as thenumber one provider of software applications to the UK accounting, legal andnot-for-profit communities". -Ends- Contacts: HgCapitalNic Humphries Tel: +44 (0) 207 089 7888 MaitlandPeter Ogden Tel: +44 (0) 207 379 5151 About HgCapital HgCapital is a private-equity investor in the European mid-market. We focus oninvestments with an enterprise value in the range of €75-500 million. Ourbusiness model combines sector specialisation with dedicated, pro-active supportto our portfolio companies as well as the corresponding management expertiseacross all phases of the investment process. HgCapital manages more than • 2.7billion for some of the world's leading institutional and private investors. Ourgoal is to achieve outstanding results for our investors, management team andintermediaries. For further details, see www.hgcapital.com About Hellman and Friedman Hellman & Friedman LLC is a global private equity investment firm with in London, New York City and San Francisco. Since its founding in 1984, the Firm hasraised and managed approximately $16 billion of committed capital. The Firm'sstrategy is to invest in superior business franchises and to be a value-addedpartner to management in select industries including media, financial services,professional services, and information services. Representative investmentsinclude DoubleClick, Inc., the NASDAQ Stock Market, Inc. (NDAQ), GartmoreInvestment Management plc, Catalina Marketing, Axel Springer AG (ASV GR),ProSieben Sat.1 AG (PSM GR), Formula One Holdings, Ltd, LPL Holdings, ArchCapital Group Limited (ACGL), Artisan Partners L.P., Mondrian InvestmentPartners, Ltd., AlixPartners, Young & Rubicam, Inc., and others. Other softwareand information services investments include: Activant Solutions Inc.,Blackbaud, Inc, Intergraph Corporation, Kronos, Mitchell International, Inc, andVertafore, Inc. For more information on Hellman & Friedman, visit www.hf.com. About IRIS IRIS provides accounting software, business & payroll software systems andservices to more than 50,000 businesses from start ups to larger organisationsand is the UK market leader in accountancy practice software with over 15,000practices, from sole practitioners to large firms using IRIS solutions everyday.For further details, see www.iris.co.uk About Computer Software Group Computer Software Group (CSG) is the UK market leader in back-office softwarefor the legal and not-for-profit sectors. The company has a customer base ofover 3,000 legal practices and in addition blue-chip organisations includingAlfred Dunhill, Zurich International, Paymaster General, Arriva, Grant Thornton,CBI, Tetra Pak, The Gap, L'Oreal, Cable & Wireless and Cancer Research UK. Forfurther details, see www.computersoftware.com. This information is provided by RNS The company news service from the London Stock Exchange