REG - HgCapital Trust PLC - Azets Group secures investment from PAI to join Hg

HgCapital TrustAnnouncement

19/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230619:nRSS1174Da&default-theme=true

RNS Number : 1174D  HgCapital Trust PLC  19 June 2023

 

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces that it has
agreed to a part realisation of its investment in Azets Group, a leading
provider of business-critical accounting, tax, payroll, audit and advisory
services to SMEs.

 

PAI Partners has joined the business as a new investor. Following completion,
PAI will hold an equal and co-controlling stake in Azets alongside current
owners Hg.

 

Terms of the transaction are not disclosed and completion is subject to
customary regulatory approvals.

 

HGT, whose shares are listed on the London Stock Exchange, gives private and
institutional investors the opportunity to participate in all Hg's
investments.

 

The transaction values HGT's investment in Azets at approximately £54.3
million. This would represent an uplift of £7.5 million (16% or 1.6 pence per
share) over the carrying value of £46.8 million in the Net Asset Value
("NAV") of HGT at 31 March 2023.

 

Note that these figures only relate to HgCapital Trust's share of Hg's overall
investment in Azets.

 

Based on the 31 March 2023 reported NAV, the pro-forma NAV of the Trust is
expected to be £2.2 billion (or 472.0 pence per share).  HGT's available
liquid resources, which includes the undrawn bank facility of £350 million
for future deployment (including all announced transactions and the final
dividend paid in May) are estimated to be £654 million (30% of the pro-forma
31 March 2023 NAV).

 

Azets Group secures investment from PAI Partners

to join Hg and support next phase of growth

 

Azets Group ("the Group"), a leading provider of business-critical accounting,
tax, payroll, audit and advisory services to SMEs, has announced today that
PAI Partners ("PAI"), a pre-eminent private equity firm, has joined the
business as a new investor. Following completion, PAI will hold an equal and
co-controlling stake in Azets alongside current owners Hg, a leading investor
in European and transatlantic software and services businesses.

 

Azets was formed by Hg six years ago, in response to the growing
digitalisation of financial compliance processes for SMEs. Since then, the
Group has grown significantly to become one of the largest tech-enabled
providers of professional advisory, financial and accounting services to SMEs
globally.

 

Azets continues to benefit from the broader trend of SMEs outsourcing non-core
and non-discretionary services, as well as the highly fragmented nature of the
sector. The business has acquired more than 90 local providers since
inception. Today, Azets' 7,600 professionals support over 93,000 clients and
generate revenues of approximately £700 million.

 

Azets is now backed by two leading private equity investors: PAI, with its
deep sector expertise in Business Services, and Hg, with its longstanding
heritage in software and services investing. Both investors have a strong
track record of partnering with management teams to rapidly scale businesses
and create global industry leaders.

 

With this support, Azets is well placed to continue its successful growth
strategy, deepening its presence in new and existing markets across Europe
through a combination of organic growth and further strategic M&A.

 

Chris Horne, Group Chief Executive Officer at Azets, said: "Azets has
established a strong reputation for delivering innovative tech-enabled
services in what has previously been a low-tech adoption sector. Our five-year
Pathway strategy outlines a clear purpose and vision of how we want our
business to develop, and we are thrilled to have selected two investors who
are as excited about our future as we are. To gain backing from another
world-class investor is testament to this evolution and will enable us to
deliver on future opportunities that will help us scale and support our
thousands of clients and colleagues globally."

 

Colm O'Sullivan, a Partner at PAI Partners, said: "With its proven and
resilient business model, Azets provides a strong platform for future growth.
Thanks to its leading market positioning, the firm is well placed to benefit
from the growing levels of compliance, regulation and outsourcing that
underpin its core services market. We look forward to partnering with the
management team and Hg in this next phase of Azets' growth."

 

Matthew Brockman, Managing Partner at Hg, said: "We are delighted to have
reached this milestone with Azets. From the original vision, we have built a
world-class company using our deep knowledge of this sector and considerable
operational capabilities in building software and services companies. This
transaction allows us to return significant capital to our investors, a huge
priority for us in the last year, while bringing on substantial new expertise
from a strong partner and retaining a substantial interest in the next leg of
growth for Azets."

 

Completion is subject to customary regulatory approvals.

 

Hg and Azets management were advised by JP Morgan as lead adviser, Jefferies,
Alpha Advisory, Skadden, EY, Deloitte and OC&C. PAI Partners was advised
by Deutsche Bank, Freshfields, KPMG, Alvarez & Marsal and Bain &
Company.

 

 

 For further details:

 Hg
 Tom Eckersley          +44 (0)208 148 5401

 HGT
 Laura Dixon            +44 (0)20 8396 0930

 Brunswick
 Azadeh Varzi           +44 (0)207 404 5959
 Hg@brunswickgroup.com

 

About HgCapital Trust plc

 

HgCapital Trust plc, whose shares are listed on the London Stock Exchange
(ticker: HGT.L), gives investors exposure through a liquid vehicle to a
portfolio of high-growth private companies in the software and services
sector. The selection of new investments and creation of value in these
businesses are managed by Hg, 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.

 

The contents of the Hg, HgCapital Trust, Azets and PAI websites are not
incorporated into, and do not form part of, this announcement.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  STREAFKPFENDEAA