REG - HgCapital Trust PLC - Hg announces sale of Argus Media

HgCapital TrustAnnouncement

22/01/2024 07:00

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RNS Number : 3732A  HgCapital Trust PLC  22 January 2024

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces that it has
agreed a full realisation of its shareholding in Argus Media, the leading
independent provider of intelligence to the global energy and commodity
markets.

 

The transaction is expected to close in the next month and is subject to
appropriate antitrust/merger controls filings.

 

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

 

This transaction values HGT's investment in Argus Media at approximately £52
million. This would represent an uplift of £4 million (7% or 0.8 pence per
share) over the pro-forma carrying value of £48 million in the Net Asset
Value ("NAV") of HGT at 30 September 2023.

 

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

 

Based on the 30 September 2023 reported NAV, the pro-forma NAV of the Trust is
expected to be £2.3 billion (or 499 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 interim
dividend paid in October) are estimated to be £753 million (33% of the
pro-forma 30 September 2023 NAV).

Argus announces strategic agreement to support next phase of growth

Company to focus on further diversification to address opportunities in
emerging commodities and the energy transition

London, 22 January 2024 - The Argus Media Group ("Argus" or the "Company"),
the leading independent provider of intelligence to the global energy and
commodity markets, today announces that it has signed a strategic agreement to
support its next phase of growth. Adrian Binks, chairman and chief executive
of Argus, along with General Atlantic, a leading global growth investor and
existing Argus minority shareholder, will each consolidate their stakes in
Argus, with General Atlantic and Argus itself acquiring shares from current
minority shareholder, Hg.

Following the transaction, Adrian Binks, who has built the Company since
taking management control in 1984, will continue to lead Argus and as a result
of the transaction, he will become the majority owner of the Company, as
envisaged when General Atlantic invested in 2016. General Atlantic will own a
large minority of the Company, with Argus management also remaining as
shareholders. Hg will fully exit its shareholding in the Company.

Founded in 1970 and headquartered in London, Argus serves over 11,000
customers in more than 160 countries, providing price assessments, news,
analytics, consulting services, data science tools, and industry conferences
to the global energy and commodities markets. Argus assessments are used as
benchmarks around the world for pricing energy, transportation, and other
commodities. Customers rely on Argus' prices for their most critical business
operations including trading, contract negotiation, risk management and
hedging, valuations, and financial reporting. The Company has delivered
uninterrupted annual revenue growth for each of the last 40 years.

Adrian Binks, Chairman and Chief Executive of Argus Media, commented: "We are
delighted that General Atlantic remains a committed partner to Argus in the
next phase of our growth. Argus serves its customers around the world by
navigating the challenges presented by the move to a sustainable future, which
involves both traditional hydrocarbon and energy transition commodities. Our
mission to bring transparency to these markets remains unchanged. I am pleased
that Argus continues to be an independent business with many employees
invested in the Company. I would like to express my thanks to the Hg team for
their support and partnership which has been instrumental in helping Argus
continue to grow."

General Atlantic is a long-term partner to Argus, having initially bought its
shares in 2016. Hg, a leading investor in European and transatlantic software
and services businesses, invested in the Company in January 2020, acquiring
half of General Atlantic's stake. Given the continued strong performance of
the Company, General Atlantic transitioned the remainder of its stake into a
continuation fund in 2021 and is investing additional capital from this fund
to increase its ownership.

Since General Atlantic's investment in 2016, Argus has more than doubled in
size and has accelerated its organic growth. FY2023 revenue grew 17% year on
year, with particularly strong momentum in energy transition products, which
grew 46%.

Gabriel Caillaux, Co-President, Managing Director, and Head of Climate and
EMEA at General Atlantic, commented: "Argus has delivered highly consistent
organic growth since our initial investment, while deepening its role as a
critical provider of proprietary pricing data to the global energy and
commodities markets. Over our seven-year partnership with the Company, Adrian
and his team have demonstrated the quality of the business and their ability
to deliver uninterrupted growth through any market backdrop. Looking ahead,
Argus continues to capture growth opportunities created by market changes and
the energy transition. We are excited to continue to work with a great team."

Nic Humphries, Senior Partner at Hg, said: "It's been a pleasure to work with
Adrian and the broader Argus management team as they continue to build an
exceptional global business serving the strategically important energy and
commodities sectors, with a true long-term vision to support their ongoing
evolution. We leave on a high, both delighted to return more capital back to
our clients, whilst also being proud to have partnered and supported the
business for the last four years. We wish the team and General Atlantic all
the best for a successful future."

Following the transaction, Gabriel Caillaux and Tom Hussey will continue to
represent General Atlantic on the Argus board.

The transaction is expected to close in the next month and is subject to
appropriate antitrust/merger controls filings. Terms of the transaction were
not disclosed. Argus Media and its shareholders were advised by J.P. Morgan as
lead financial advisor. Morgan Stanley and Evercore acted as financial
advisors to General Atlantic and Hg respectively. Macfarlanes LLP, Freshfields
Bruckhaus Deringer LLP, Skadden, Arps, Slate, Meagher & Flom (UK) LLP, and
White & Case LLP acted as legal counsel to Argus Media, General Atlantic,
Hg, and Adrian Binks.

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. Argus Media and General Atlantic are
not incorporated into, and do not form part of, this announcement.

 

 

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