HgCapital announces investment in Sovos Compliance

RNS Number : 2452M

HgCapital Trust PLC

19 January 2016

 

HgCapital, the Manager of HgCapital Trust plc ("The Trust"), today announces a majority investment in Sovos Compliance ("Sovos"), a leading global provider of regulatory tax compliance software, headquartered in Boston, USA. HgCapital will be the lead investor in the new transaction structure, alongside Vista Equity Partners ("Vista"). The terms of this transaction were not disclosed.

HgCapital Trust plc will invest in Sovos 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 £24.9million, including approximately £8.4 million in co-investment.

The acquisition of Sovos represents the seventh investment by the HgCapital 7 Fund, and following completion, the Fund will be approximately 51% 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 £59.3 million (12% 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 £138 million (28% of the pro-forma 30 November 2015 NAV).

HgCapital announces investment in Sovos Compliance

HgCapital announced today a majority investment in Sovos Compliance ("Sovos"), a leading provider of regulatory tax compliance software, headquartered in Boston, USA. Sovos will sit within HgCapital's Technology, Media & Telecommunications ("TMT") sector. HgCapital will assume majority ownership from Vista Equity Partners ("Vista"), which will retain a significant minority stake in Sovos. The terms of this transaction were not disclosed.

Sovos is a global provider of taxation compliance solutions, managing all aspects of the tax compliance process, from tax calculation, forms completion and ultra-high-volume filing to secure funds transfer to state and local revenue departments.  At the heart of Sovos' software suite is a powerful tax calculation engine that leverages the industry's most comprehensive repository of more than 210 million tax rules in 13,500 plus jurisdictions across more than 200 countries. 

HgCapital has followed Sovos closely for several years, and this investment is in line with HgCapital's proven, sector-focused approach of investing in leading global providers of regulatory-driven software. Sovos demonstrates many of the characteristics that HgCapital looks for, providing an excellent platform for future growth. HgCapital will work closely with the management team and Vista to accelerate Sovos' strong, organic growth and support further accretive M&A to build a global software champion.

"We are delighted to begin our work with Sovos CEO Andy Hovancik, his talented management team, and Vista Equity Partners," said Jonathan Boyes, a Director in the HgCapital TMT team. "HgCapital has a strong track record of successful investments in tax and regulatory compliance-driven software companies. We have been tracking the excellent progress Sovos has made in establishing itself as a global player in this sector, and we look forward to supporting their continued growth going forward."

Hovancik shared Boyes's enthusiasm, commenting that:

"HgCapital's investment presents a significant opportunity to build on our success and accelerate the development of our global platform for tax compliance and reporting," said Andy Hovancik, Sovos CEO. "With the support of Vista Equity Partners, Sovos transformed into a trusted partner for companies navigating today's dynamic regulatory environment.  HgCapital's talented team, in-depth knowledge of regulatory compliance markets and commitment to growth allows us to solidify our leadership position and deliver even more value to our clients." 

Shea & Company acted as the exclusive financial advisor to Vista and Sovos during the transaction.

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For further details:

HgCapital

Laura Dixon

[phone]

Maitland                                                                                                            

Seda Ambartsumian	[phone]
Jamie Dunkley	[phone]

Vista Equity Partners

Alan Fleischmann

[phone]

[e-mail]

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.

About Vista Equity Partners

Vista Equity Partners is a U.S.-based investment firm with offices in Austin, Chicago and San Francisco, with more than $14 billion in cumulative capital commitments. It currently invests in software, data and technology-based organizations led by world-class management teams with long-term perspective. Vista is a value-added investor, contributing professional expertise and multi-level support that enables companies to realize their full potential. Vista's investment approach is anchored by a sizable long-term capital base, experience in structuring technology-oriented transactions and proven management techniques that yield flexibility and opportunity in private equity investing. For more information, please visit vistaequitypartners.com.

About Sovos Compliance

Sovos designs technology solutions to help businesses meet the demands of their unique tax compliance and reporting obligations.  Our trusted industry expertise and global research capability enables over 4,500 clients to operate with the confidence to efficiently navigate today's dynamic regulatory environment.  Sovos utilizes a unique ability to turn knowledge into highly functional, scalable software that seamlessly integrates with a wide-array of applications and information technologies used by businesses today.  Ultimately, we give clients peace of mind by simplifying tax compliance, providing greater control and visibility, and mitigating compliance risk.  To learn more, please visit www.sovos.com.

Neither the contents of HgCapital Trust's, HgCapital's, Vista's or Sovos' 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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