REG - HgCapital Trust PLC - Hg further invests in The Access Group

HgCapital TrustAnnouncement

08/06/2022 07:00

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RNS Number : 0716O  HgCapital Trust PLC  08 June 2022

 

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces a
recapitalisation of The Access Group, a leading provider of business
management solutions to mid-market organisations in the UK, Ireland and Asia
Pacific.

 

As part of the transaction, Hg Saturn Funds will make a new investment in The
Access Group, while Hg's Genesis 8 Fund will partially reduce its holding.
 As a result of the transaction, HGT will receive a net distribution of
£55.6 million.

 

This transaction values HGT's existing investments in The Access Group at
£441.1 million. This would represent an uplift of £104.7 million (31%) or
22.9 pence per share over the carrying value of £336.4 million in the Net
Asset Value ("NAV") of HGT at 31 March 2022.

 

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

 

Note that these figures only relate to HGTs share of Hg's overall investment
in The Access Group.

 

Based on the 31 March 2022 reported NAV, the pro-forma NAV of the Trust is
expected to be £2.1 billion (or 452.1 pence per share). HGT's available
liquid resources, which includes the undrawn bank facility of £250 million
for future deployment, are estimated to be £436 million (21% of the 31 March
2022 pro-forma NAV of £2.1 billion).

 

The investment will reduce HGT's outstanding commitments to invest in Hg
transactions to approximately £617 million (30% of the pro-forma 31 March
2022 NAV).

 

THE ACCESS GROUP ANNOUNCES SUBSTANTIAL INVESTMENT

TO DRIVE CONTINUED EXPANSION AT £9.2 BILLION VALUATION

 

·      Secures continued backing from its largest shareholders and
experienced software investors, Hg and TA Associates

·      Enterprise value of £9.2 billion

·      Secures new refinancing including incremental facility for over
£1 billion to support further strategic acquisitions

 

LONDON, UK - 8 June 2022 - The Access Group, a leading provider of business
management software to mid-market organisations in the UK, Ireland and Asia
Pacific, today announced further investment from its shareholders, Hg and TA
Associates, with an associated enterprise value of £9.2 billion, believed to
make it one of the largest UK headquartered software providers.

 

Access has grown significantly since its incorporation in 1991, delivering
uninterrupted profitable growth in the last 15 years. Since 2020, Access has
more than doubled in size driven by double-digit organic growth, combined with
strategic M&A in the UK, Ireland and Asia Pacific. Access has grown its
customer base to more than 60,000 and its employees to approximately 5,000,
expanding internationally with offices in nine countries.

 

The announcement of the further strategic investment from Hg, a leading
software and services investor, and TA Associates, a leading global growth
private equity firm, is significant. In addition, GIC, a global institutional
investor, has confirmed a new investment in Access and that it will become a
minority shareholder in the company. The transaction, which is subject to
customary regulatory approvals, is expected to close in the second half of
2022.

 

Commenting on today's announcements, Chris Bayne, CEO of The Access Group,
said: "I'm incredibly proud of our continued success and delighted that our
leading investors, Hg and TA, continue to support us as the company expands in
the UK, Ireland and Asia Pacific. With GIC's additional investment, Access
continues to receive strong support from the investment community, helping to
drive our performance and growth plans.

 

"We have made massive progress in our growth strategy since we announced the
last investment from Hg and TA in 2020. Hg and TA's further investment in
Access signifies our business and team's strength. We look forward to
expanding and continuing our relationship with all three of our investors as
we carry on with organic and acquisitive growth projects and further
geographic expansion.

 

"Over the next few years, the management team and I will continue to focus on
our growth strategy and our products and solutions, especially Access
Workspace, our SaaS platform, which allows our customers' products and data to
be consumed in one place with a consistent user experience.

 

"The acquisition facility gives Access the power for even more significant
expansion as we continue to add exciting new technology and people to the
Group. It's our mission to transform our customers' productivity and give them
the freedom to do more of what's important to them."

 

Jonathan Boyes, a Partner at Hg, said: "Access has proved to be one of the
biggest UK successes in cloud software. Chris and his team should feel
incredibly proud of their achievements, delivering an exceptionally robust
performance whilst significantly growing the business during a tough
environment over the last few years. It has been a pleasure to work with the
team and we're delighted to commit further as a significant investor in the
business. Hg is now a proud investor in three of the largest private
equity-owned software businesses in Europe and we're more excited than we've
ever been about the future prospects of the role of SaaS in the business
world."

 

J. Morgan Seigler, a Managing Director at TA Associates, said: "Over the
course of TA's more than seven-year partnership with Access, the business has
continually shown its strength, resilience and capacity for innovation, driven
by the leadership of Chris and the management team. We have been proud to
support the journey and are thrilled to further our partnership. Looking
ahead, we believe the business is well-positioned to continue delivering on
its vision, focusing on strengthening product offerings, both organically and
through strategic acquisitions, for its growing customer base."

 

Rothschild & Co advised The Access Group and Arma Partners advised Hg on
the transaction. Legal advisors were Latham & Watkins, Linklaters, and
Travers Smith. Deloitte and Kirkland & Ellis advised The Access Group on
the refinancing activities.

 

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, TA, GIC and The Access Group's
websites are not incorporated into, and do not form part of, this
announcement.

 

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