Sale of Sequel

RNS Number : 5611O

HgCapital Trust PLC

21 August 2017

 

HgCapital Trust Plc

21 August 2017

HgCapital Trust adds to NAV per share from sale of Sequel

HgCapital, the Manager of HgCapital Trust plc (the "Company"), has announced that it has sold Sequel Business Solutions ('Sequel'), a provider of software and services to the Lloyd's of London and the broader insurance markets, to Verisk Analytics (Nasdaq: VRSK), a leading data analytics provider serving customers in property/casualty insurance, natural resources, and financial services, headquartered in Jersey City, NJ USA.

The Company, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital's investments. The Company will realise cash proceeds of approximately £20.2 million on completion of the transaction.  This represents an uplift of £12.5 million (161%) or 33 pence per share over the carrying value of £7.7 million in the Net Asset Value ("NAV") of the Company at 31 May 2017 which was based on the Directors' valuation as at 31 December 2016.

Based on the 31 May 2017 reported NAV (including all announced transactions and the revaluation of the carried interest provision), the pro-forma NAV of the Company is expected to increase to £659.2 million or 1,766.2 pence per share. The Company's liquid resources available for future deployment are estimated to be £177 million (27% of the pro-forma 31 May 2017 NAV).

The investments within the Company's portfolio were last valued at 31 December 2016. The Company's 2017 interim results, including the re-valuation of the portfolio as at 30 June 2017 will be announced on 11 September 2017.

HgCapital's Mercury 1 Fund agrees sale of Sequel Business Solutions to Verisk Analytics

21 August 2017, London: HgCapital is pleased to announce that it has sold Sequel Business Solutions ('Sequel'), a provider of software and services to the Lloyd's of London and the broader insurance markets, to Verisk Analytics (Nasdaq: VRSK), a leading data analytics provider serving customers in property/casualty insurance, natural resources, and financial services. Headquartered in Jersey City, NJ USA, Verisk Analytics operates in 29 countries and is a member of Standard & Poor's S&P 500® Index.

HgCapital partnered with the management of Sequel in July 2014 to support the acquisition from its founder. The deal represented the fourth investment for the Mercury 1 fund and resulted from HgCapital's ongoing focus on the insurance software sector.

Led by CEO Mario Garcia and with HgCapital's support, Sequel has transformed over this period. Its core Eclipse product set has been broadened to a full suite supporting all the complex risk activities of insurers and brokers, including risk aggregation, claims management and re-insurance; customer numbers have tripled; and Sequel's business model has rapidly transitioned to recurring revenue. Over the past three years, the company has seen compound revenue growth of 14% per annum.

Following this sale, the Mercury 1 Fund will have delivered combined returns of 3.0x of invested cost and a c. 44% gross IRR on all realised investments, including proceeds from the prior sales of Zitcom to Intelligent (announced in June 2017 for 3.3x and 141% gross IRR) and Relay Software to Applied Systems (announced in August 2016 for 2.1x cost and 39% gross IRR). The Mercury 1 Fund has now delivered in aggregate 83% of invested cost on all realised investments.

Mario Garcia, CEO of Sequel, said: "I would like to thank HgCapital for being a great partner as we developed Sequel into the leading provider of software to the complex insurance market. They had a transformative impact on our business. We are thrilled to join Verisk, whose data and technology capabilities will allow us to continue to deliver first class service to our customers."

Sebastien Briens, Partner at HgCapital, commented: "We are delighted that Sequel can continue to flourish with such a strong and capable partner. We are proud to have been associated with Mario and his team in driving the growth of Sequel in the past three years, and believe that the business is very well positioned to be successful within the property/casualty insurance markets."

HgCapital and Sequel were advised by Quayle Munro, Linklaters and Deloitte.

- Ends -

For further details:

HgCapital

Laura Dixon

[phone]

Maitland

Tom Eckersley

[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 Company 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, Sequel's, nor Verisk Analytics' 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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