HgCapital agrees sale of minority interest in JLA
HgCapital Trust plc
23 October 2015
HgCapital, the Manager of HgCapital Trust plc ("The Trust"), today announces the sale of a minority interest in JLA to a group of institutional investors. JLA is a leading UK provider of business-critical asset maintenance services to SMEs. The Trust is a listed investment trust which participates in all of HgCapital's investments alongside their institutional clients. The sale will reduce pro rata the interests of the Trust and other institutional clients of HgCapital. Following completion of this transaction (which is subject to regulatory approval), HgCapital will retain c. 62% of the equity in the company on behalf of its HgCapital 6 fund clients, including the Trust.
In addition to the sale of a minority equity interest, the business has also been re-financed. The Trust will realise cash proceeds of approximately £17.3 million on completion of these two liquidity events, in addition to the £4.5 million received in October 2014 from a previous refinancing.
Originally acquired by HgCapital in March 2010, JLA is one of the UK's leading providers of commercial laundry and catering equipment on a contracted basis. JLA operates across a diverse sector base offering customers a fully inclusive machine supply and service proposition under the name of Total Care. Furthermore, the company provides customers with supplementary products and services (e.g. service contracts, compliance and safety service solutions, equipment sales and consumables).
The combined return represents an investment multiple of approximately 3.5x over JLA's holding period to date. The total value of cash proceeds and the retained stake (£20.4 million) compares to a carrying value of £27.4 million in the Net Asset Value ("NAV") of the Trust at 30 September 2015, which was based on the Directors' valuation as at 30 June 2015. This represents an uplift of £10.3 million (37%) or 27 pence per share.
Once the transaction has completed, the commitment made by the Trust in 2009, in the HgCapital 6 fund, will have returned approximately 63% of capital invested to date, at a multiple of 2.5x original cost.
Upon completion, given the continued strong performance of HgCapital 6 and the impact of this transaction, the Directors are expected to increase the provision for carried interest on this portfolio from £12.7 million at 30 June 2015 to £21.8 million.
Based on the 30 September 2015 reported NAV (and after adjusting for the impact of the above transactions and provision), the NAV of the Trust is expected to increase to £486.8 million or 1,304.1 pence per share. The Trust's liquid resources available for future deployment are estimated to be £48.1 million (10% of the adjusted NAV), excluding a £40 million standby facility.
Robert W. Baird acted as financial advisor to HgCapital on this transaction.
-End-
For further details:
HgCapital
Stephen Bough +44 (0)20 7089 7888
Maitland
Tom Eckersley +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 (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's, HgCapital Trust's or JLA'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.
This information is provided by RNS
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