HgCapital announces investment in Citation

RNS Number : 0325P

HgCapital Trust PLC

15 February 2016

 

15 February 2016

HgCapital, the Manager of HgCapital Trust plc ("The Trust"), today announces a majority investment in Citation, one of the UK's leading providers of Health & Safety, HR, Employment Law and ISO services to SMEs. The terms of this transaction were not disclosed.

HgCapital Trust plc will invest in Citation alongside other institutional clients of HgCapital, who will participate through the HgCapital 7 Fund. The Trust, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital's investments. The Trust will contribute a total of approximately £10.5 million.

The acquisition of Citation represents the ninth investment by the HgCapital 7 Fund, and following completion, the Fund will be approximately 60% invested.

Based on the 30 November 2015 reported NAV (including all announced transactions) the Trust's liquid resources available for future deployment are estimated to be £38.8 million (8% of the pro-forma 30 November 2015 NAV, excluding a £40 million standby facility). The transaction will reduce the Trust's outstanding commitments to invest in HgCapital deals to approximately £117 million (24% of the pro-forma 30 November 2015 NAV).

HgCapital announces investment in Citation

HgCapital's Services team has announced today a majority investment in Citation, one of the leading providers of HR and Employment law, Health & Safety, and ISO services to UK businesses. HgCapital will assume majority ownership from ECI Partners, investing alongside the existing management team. The terms of the transaction were not disclosed.

Citation was established twenty years ago and provides professional regulatory-driven compliance services to over 16,000 clients across a range of specialist areas, including: human resources and employment law; health and safety; ISO accreditation; and staff training. The Company is headquartered in Cheshire and employs over 350 professionals.

HgCapital has followed Citation closely for several years, and this investment fits HgCapital's strategy of investing in leading technology enabled professional services providers in regulatory-driven and fast growing niches.  It follows similarly themed prior investments such as Kinapse, Radius, ATC and SHL. Citation demonstrates many of the business model characteristics that HgCapital looks for, providing an excellent platform for growth across a diversified and loyal client base, led by a strong and experienced management team.

Chris Morris, CEO, Citation commented, "Since joining Citation in 2013, the business has delivered sustained growth and has developed all areas of sales and marketing, service delivery and culture. The management team have enjoyed the period of ownership under ECI Partners, where we have put in place a platform for growth and success that will continue for many years, and we are excited to be partnering with HgCapital to continue this development and realise the very great potential that remains in the business and in the wider sector."

"We first spent time with Citation in 2012 before ECI invested in 2013, and have always been impressed by the quality of its business model.  We have followed the company's success over the last three years, and it is a pleasure to finally work alongside the team to support its ongoing growth." said Thorsten Toepfer, a Director in the HgCapital Services team.

Matt Rourke, Partner at HgCapital added, "It is undoubtedly the team and the culture that have driven the rapid recent growth at Citation. The combination of a highly predictable and secure business model with a top quality team and positive culture is nearly always a winning formula. We are very happy to be invested in such an opportunity."   

HgCapital was advised on this transaction by Rothschild, Dean Street Advisors, Weil, Gotshal & Manges (legal) and Deloitte (financial and commercial due diligence, debt and tax).

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For further details:

HgCapital

Laura Dixon                               [phone]

Maitland

Seda Ambartsumian                   [phone]

Jamie Dunkley                           [phone]

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, ECI Partners' or Citation'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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