Disposal

RNS Number : 2282E

HG Capital Trust PLC

04 April 2011

 



HgCapital has agreed to sell its investment in SLV Group. HgCapital Trust plc, the listed investment trust which invests in all HgCapital's deals alongside its institutional clients, will realise estimated cash proceeds of £24.8 million. This compares to a carrying value of £14.6 million in the Net Asset Value (NAV) of the Trust at 28 February 2011, an uplift of £10.2 million (33.0 pence per share basic; 27.5 pence per share fully diluted*), and an original cost of £6.0 million. Based on the 28 February 2011 NAV and the impact of this transaction, the NAV of HgCapital Trust plc is estimated to be £362.2 million (1,164.5 pence per share basic; 1,128.7 pence per share fully diluted*) and liquid resources are estimated to be £111 million (30.6% of the estimated NAV).

*The calculation of fully diluted earnings per share assumes that all subscription shares in issue are exercised at their minimum price of 950 pence.

Set out below is the text of a press release issued today by HgCapital announcing the divestment.

HgCapital announces the sale of SLV Group

London, 4 April 2011: HgCapital has today announced the sale of SLV Group ("SLV"), one of the fastest growing providers of innovative lighting products and systems in Europe, to Cinven.

This is HgCapital's 36^th realisation since the summer of 2005, representing an overall investment multiple for these 36 transactions of 2.5x original cost and a gross IRR of over 30%.  It is also HgCapital's third transaction in the German market since the start of 2010, following the acquisition of SimonsVoss Technologies AG in May, and the acquisition of Teufel Speakers GmbH in June 2010.  Following this realisation, HgCapital 5 will have returned c. 75% of all invested capital.

SLV, based near Aachen, Germany, employs approximately 190 people in Germany, and has subsidiaries and associates in Germany, France, Italy, Belgium, Switzerland, Hong Kong, the US and Russia. SLV has evolved into one of the most successful European providers of lighting systems.

Under HgCapital's stewardship, SLV has achieved growth well above the industry average, and performed strongly during the economic downturn. This success has been driven by SLV's strategy of combining the technical expertise required for development of innovative lighting systems in Germany, with the cost advantages derived from manufacturing in emerging markets, a highly efficient logistics operations and an extensive multi-channel distribution system based on strong partnerships.

Over the last four years, HgCapital has taken a pro-active approach to the management of SLV, progressing a number of initiatives including strengthening the management team by introducing a new CFO to the Board; developing the Group's international operations, including the establishment of SLV North America in 2009; acquiring a majority stake in SLV's distribution partners in France, Switzerland, Italy and Belgium; and investing in the expansion of SLV's logistics capabilities.

Commenting on the realisation, Justin von Simson, a Partner at HgCapital, stated: "SLV is a very good example of how HgCapital can add significant value to an already successful growth business and German "hidden champion". It has been a pleasure working with SLV's management team to help develop SLV's international presence, distribution and logistics capability and its profitability. The business is now well positioned for the next stage of its development."

Nic Humphries, CEO of HgCapital, said: "This transaction is further proof of our ability to establish robust growth-oriented partnerships with successful family-owned companies and re-enforces the success of our sub-sector focused, thematic investment strategy."

HgCapital was advised in this transaction by Macquarie Capital Advisers Germany.

- Ends -

For further details please contact:

HgCapital:	Justin von Simson	[phone]
Maitland:	Neil Bennett	[phone]
		[phone]

About HgCapital Trust plc

HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange.  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.  The Trust has won the Investment Week Private Equity Investment Trust of the Year in 2005, 2006, 2007, 2008, 2009 and 2010.   For further details, please see www.hgcapitaltrust.com

About HgCapital

HgCapital is a private equity investor focused on the European middle market. Its business model combines sector-specific thematic investing with dedicated portfolio management support. HgCapital seeks to invest in growth companies in expanding sectors which create jobs across Western Europe.

HgCapital is also an investor in renewable energy, establishing itself as a market leader by building a dedicated energy investment team in 2004. It continues to invest a dedicated fund in a range of renewable power technologies across Western Europe.

HgCapital manages over £3.3 billion for some of the world's leading institutional and private investors.  For further details, please see www.hgcapital.com.

About SLV

Headquartered in Übach-Palenberg in the German state of North Rhine-Westphalia, the SLV Group is one of the leaders in the market for innovative lighting systems and technical and residential lighting for indoor and outdoor usage. In Germany, the company has 190 employees.

As a B2B mail-order business, the Company focuses on marketing its products through resellers in over 60 countries across the world and is not selling directly to end users. Its wide range of products encompasses individual lighting systems for home and exterior uses as well as full-scale high or low-voltage lighting systems for store and fair construction. The company's own product development department works permanently on new products with selected designers and engineers. These are then manufactured at facilities and partners with which the company has long-standing relationships, mostly in Asia.

Due to efficient co-operation with Asian suppliers and the restrictive selection of partners and suppliers as well as stringent quality assurance, the company is able to offer high-quality products featuring innovative designs at reasonable prices. Minimum delivery times are ensured in nearly all European countries thanks to favourable transportation links and a highly efficient logistics centre fitted with a high-tech high-bay warehouse at which 98% of SLV products are kept in stock at all times.  Further information on SLV is available at www.slv.de.

Neither the contents of HgCapital's or SLV's website 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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