Completion of Goldshield MBO
HgCapital Trust plc announces completion of its participation in the £179 million
management buyout of Goldshield plc
London, 15 January 2010: HgCapital Trust plc, which provides investors with a listed vehicle to invest in all private equity deals managed by HgCapital, today announced that it had completed its investment of £11.3 million in Goldshield plc. The investment has been made by way of a recommended cash offer valued at £179.0 million. Goldshield is a UK-based pharmaceuticals company. The total investment of funds by the Trust and other clients of HgCapital is £80.8 million.
Goldshield
Goldshield owns a portfolio of niche generic and patented pharmaceutical products which service markets often overlooked by other generics players. The company's management has considerable experience in extending the life and maximizing the revenue streams arising from long established products by applying greater attention to the market's requirements than many larger competitors.
Management's plan to create value involves an increased investment in research and development expenditure, widening the applications of existing products and reducing costs. In addition, the company will continue to identify and acquire new products from large pharmaceutical companies seeking to divest non-core assets. Revenues in this segment have been resilient and there are sufficient good targets to allow HgCapital and Goldshield to pursue a buy and build strategy.
HgCapital Trust
Following the investment, HgCapital Trust holds approximately £85.7 million in cash, available for deployment in private equity deals.
Roger Mountford, chairman of HgCapital Trust, commented: "The successful acquisition of Goldshield demonstrates that private equity investments can be completed in today's market and that investors who have positioned themselves with cash to invest in a recession can identify and acquire good businesses on attractive terms. While we should not expect a smooth recovery from recession, we believe that 2010/11 will offer a growing pipeline of opportunities to build a portfolio of high quality businesses at realistic prices."
HgCapital Trust is an investment trust, listed on the London Stock Exchange. It invests only in transactions managed by HgCapital, the sector-focused private equity firm that invests in mid-market deals across the UK and Northern Europe. HgCapital's other institutional clients invest by committing to subscribe capital to a limited partnership fund, the latest being HgCapital 6. HgCapital Trust has committed to invest alongside HgCapital 6 on a pro rata basis and has the ability to opt out of an investment to be made by it if the Trust does not have the cash available to invest.
Ian Armitage, Chairman of HgCapital, said: "Having sold 30 companies in the run up to the credit crunch and being judicious investors in 2007 and 2008 we are well-placed to take up good acquisition opportunities, both for HgCapital Trust and our other institutional clients. With a small portfolio that is performing well, we have fewer distractions than many private equity firms so our time is spent on finding the best deals we can before they come to market. We believe we can exploit these strengths to take advantage of the wide range of good business that will become available for purchase over the next three years."
"As 2010 opens we have the strongest pipeline of potential new investments for some time. However, we continue to believe that difficult trading conditions will persist and so we will carefully balance the opportunity to acquire businesses against the need to have clear line of sight on their trading prospects. We expect the rate at which we will deploy the funds to accelerate progressively over the next 36 months."
For further details:
|
HgCapital Trust |
Ian Armitage |
+44 (0)20 7089 7888 |
|
Maitland |
Neil Bennett |
+44 (0)20 7379 5151 |
|
|
Rowan Brown |
+44 (0)20 7379 5151 |
About HgCapital Trust plc
HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange. The trust gives investors exposure to a portfolio of high-growth private companies, through a liquid vehicle. This portfolio is 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 every year since 2005.
This information is provided by RNS
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