HgCapital announces the sale of SHL
HgCapital Trust's NAV rises on realisation of SHL
HgCapital has agreed to sell its investment in SHL. Upon completion of the transaction which is expected to happen early in August 2012, HgCapital Trust plc, the listed investment trust which invests in all HgCapital's deals alongside its institutional clients, will realise estimated cash proceeds of approximately £27.1 million. This represents an uplift of £5.4 million over the carrying value of £21.7 million in the Net Asset Value (NAV) of the Trust at 31 May 2012 which was based on the Directors' most recent valuation. On completion, the transaction will increase NAV per share by approximately 17.2 pence (basic) and 14.7 pence (fully diluted*). Based on the 31 May 2012 NAV and the impact of this transaction, the NAV of HgCapital Trust plc is estimated to be £349.1 million (1,096.9 pence per share basic; 1,075.3 pence per share fully diluted*).
The sale proceeds represent a multiple of more than three times the original cost of £9.0 million.
Based on the 31 May 2012 NAV and the effect of this transaction, liquid resources (including a £40 million undrawn bank facility) are estimated to increase to £100.5 million (29.2% of the estimated NAV).
*The calculation of fully diluted earnings per share assumes that all subscription shares in issue are exercised at their minimum price of 950 pence.
Set out below is the text of a press release issued today by HgCapital announcing the transaction.
HgCapital announces the sale of SHL
London, 3 July 2012: HgCapital has today announced the sale of SHL, the global leader in talent measurement, to The Corporate Executive Board Company ("CEB") (NYSE: EXBD) for $660 million.
SHL was acquired by funds managed by HgCapital in October 2006 as a public to private transaction and subsequently merged with Previsor, a US based competitor, in January 2011. The sale to CEB represents an investment multiple in excess of 3.1x original cost and a gross IRR of 26% over the investment period for HgCapital's investors.
The sale of SHL represents HgCapital's sixth realisation from its HgCapital 5 Fund, which now has delivered a realised investment multiple and IRR of 2.7x and 30% respectively. It will have returned over 120% of invested capital back to investors since HgCapital 5 was raised in 2006, with seven active investments still remaining in the portfolio. Since the start of the global economic downturn in the autumn of 2008, HgCapital has been an active seller realising a total of twelve investments over this period (versus an active unrealised portfolio of 24 investments) and returning approximately £1.1 billion in proceeds to clients at a time of economic uncertainty.
SHL is the leader in talent measurement, driving better business results for clients through superior people intelligence and decisions - from hiring and recruiting, to employee development and succession planning. With a presence in over 50 countries, SHL delivers more than 25 million talent assessments annually in over 30 languages - allowing over 10,000 business customers to benefit from both global expertise and local insight. Along with its world-class consulting practices and 24-hour support centre, SHL clients can access over 1,000 assessments through an easy-to-use technology platform. Headquartered in London, the company has offices in North and South America, Europe, the Middle East, Africa, Asia and Australia/New Zealand.
SHL was part of HgCapital's Services Team portfolio of investments, which also includes JLA, the UK's leading supplier of commercial laundry equipment and ATC, the global fiduciary group. Under HgCapital's stewardship, SHL has grown revenue by over 80% and EBITDA by over 200%, both organically and via acquisition, well above the industry average and despite experiencing challenging trading conditions during the recession. HgCapital has taken a pro-active approach to the management of the company, working closely with the executive team to develop and improve the business by:
- Strengthening the management team and supporting the recruitment of high calibre individuals to key positions within the company;
- Restructuring the business to create more centralisation including the creation of a global shared service centre;
- Making a significant investment in technology with the creation of a new modern SaaS platform;
- Focusing on innovative new product development including the recently launched Talent Analytics solution which delivers demonstrable returns on investment for clients;
- Improving the sales capability of the business through increasing resources and a greater focus on measuring return on investment for customers;
- Providing strong customer support to its extensive blue chip customer base across the world.
HgCapital also supported SHL's merger and subsequent integration with Previsor, the leading U.S. provider of employment assessment solutions owned by Veronis Suhler Stevenson. This strategic development allowed SHL to extend its presence in the US and to further broaden its product portfolio.
CEB is the leading member-based advisory company. By combining the best practices of thousands of member companies with CEB's advanced research methodologies and human capital analytics, CEB equips senior leaders and their teams with insight and actionable solutions to transform operations. CEB's client and member network includes 85% of the Fortune 500, 50% of the Dow Jones Asian Titans, and 70% of the FTSE 100. It spans more than 50 countries, 5,700 individual organizations, and 225,000 business professionals.
CEB's acquisition brings together two highly complementary businesses to create the world's foremost source of insight on the measurement and management of talent for business and government. Marrying CEB's insights and data with SHL's assessments, predictive analytics and robust technology platform will create a global organization with a greatly enhanced capability to help clients manage talent, transform operations, and reduce risk.
Commenting on the realisation, Lisa Stone, a Partner in HgCapital's Portfolio Management team, said: "SHL is a very high quality business, recognised in its industry as the clear global leader. The management team has done a tremendous job in growing and developing the business and I am delighted that SHL is finding a new home with CEB where it has a strong strategic fit."
Matt Rourke, Head of HgCapital's Services team, said: "The sale of SHL marks the continued development of HgCapital's investment focus in the business services sector. SHL's merger with Previsor was just one element in a story of active support by the team at HgCapital. SHL is a great business, led by an exceptional team. These qualities have been reflected in the strategic value of the investment for CEB. "
HgCapital was advised on this transaction by Morgan Stanley, Weil, Gotshal & Manges and Deloitte.
- Ends -
For further details:
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HgCapital |
Richard Bold |
+44 (0)20 7089 7943 |
|
Maitland |
Neil Bennett |
+44 (0)20 7379 5151 |
|
George Hudson |
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|
Rowan Brown |
About HgCapital
HgCapital is a sector expert private equity investor, supporting management teams to grow industry champions. Deeply resourced sector teams focus on specific sub-sectors and investment themes to identify companies occupying an established position within a niche, which have the potential to grow faster than their market, create employment and become the leader in their industry. HgCapital's dedicated portfolio management team provides practical support to management teams to help them realise their growth ambitions. HgCapital invests in expanding segments of the Healthcare, Industrial, Services, TMT and Renewable Energy sectors across Western Europe.
Based in London and Munich, HgCapital manages over £3.7 billion for some of the world's leading institutional and private investors. For further details, please see www.hgcapital.com.
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 and tax-efficient 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. The Trust has won the Investment Week Private Equity Investment Trust of the Year every year since 2005. For further details, please see www.hgcapitaltrust.com
Neither the contents of HgCapital's, HgCapital Trust's, SHL's or The Corporate Executive Board Company's website 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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