HgCapital Trust PLC HgCapital announces sale of Zenith to Bridgepoint (4206V)
30 January 2017 - 6:01PM
UK Regulatory
TIDMHGT
RNS Number : 4206V
HgCapital Trust PLC
30 January 2017
30 January 2017
HgCapital, the Manager of HgCapital Trust plc ("The Trust"), has
announced that it has agreed the sale of Zenith, the largest
independent vehicle leasing business in the UK, to Bridgepoint in a
transaction totalling GBP750 million. The sale of Zenith delivers a
2.9x investment multiple and a 46% gross IRR over the investment
period.
The Trust, the listed investment trust which participates in all
HgCapital's investments alongside its institutional clients, will
realise cash proceeds of approximately GBP59.0 million on
completion of the transaction. This represents an uplift of GBP15.4
million (35%) or 41 pence per share over the carrying value of
GBP43.6 million in the Net Asset Value ("NAV") of the Trust at 30
November 2016 which was based on the Directors' valuation as at 30
June 2016.
Based on the 30 November 2016 reported NAV (including the impact
of the revaluation of the carried interest provision) the pro-forma
NAV of the Trust is expected to increase to GBP601.5 million (or
1,611 pence per share). The Trust's liquid resources available for
future deployment are estimated to be GBP105 million (17% of the
pro-forma 30 November 2016 NAV). In addition, the Trust has access
to a GBP80 million standby facility, which is currently
undrawn.
The investments within the Trust portfolio were last valued at
30 June 2016. The Trust's 2016 annual results, including the
re-valuation of the portfolio as at 31 December 2016 will be
announced on 6 March 2017.
HgCapital announces sale of Zenith to Bridgepoint
30 January 2017: HgCapital is pleased to announce that it has
agreed the sale of Zenith, the largest independent vehicle leasing
business in the UK, to Bridgepoint in a transaction totalling
GBP750 million.
Headquartered in Leeds, with full-service operations in both
Solihull and Wokingham, Zenith has over 500 employees and provides
end-to-end automotive solutions focused on contract hire, salary
sacrifice, fleet management and short-term hire services to
customers across the UK. The company operates a fleet of c.85,000
vehicles and focuses on serving blue-chip customers, principally as
sole supplier. Zenith was recently ranked 7th in the FN50's list of
the UK's top 50 contract hire companies.
HgCapital initially invested in Leasedrive in December 2013
(with LDC retaining a minority stake in the business), subsequently
completing the merger with Zenith in February 2014, and the
business has operated as a single entity since March 2014. The
merger of Zenith and Leasedrive was driven by the highly
complementary nature of the two businesses and the potential to
create economies of scale.
A substantial part of the value created during HgCapital's
investment period has been driven by the close collaboration of
Zenith's management and the HgCapital team. Zenith has continued to
deliver strong double-digit revenue and EBITDA growth over the past
year (19% p.a. CAGR since March 2014) and the contracted nature of
its business model means that a significant proportion of future
growth is already underpinned by existing customer contracts.
Andrew Land, Partner, HgCapital, said: "We have had a very
successful partnership with the Zenith management team and are
proud to have been part of the Company's success. The business
model has been a great fit with Hg's investment strategy, providing
mission-critical services to customers through long-term
relationships and the use of proprietary technology. We have no
doubt that Tim, Mark and the rest of the team will have continued
success working with Bridgepoint."
Tim Buchan, CEO at Zenith commented "We thank HgCapital for
their contribution and are pleased to welcome Bridgepoint as our
new partner. We look forward to working together on our long-term
strategy of continued investment in product and system
developments."
Emma Watford, partner at Bridgepoint and head of its business
services sector team, commented: "Zenith is already best-in-class
with a proven business model that has had an unbroken track record
of growth over a long period. It benefits from an exceptional
management team and, with them, we believe that the business can
continue its impressive growth trajectory through its continued
focus on customer service, technology and targeted acquisition
activity."
HgCapital were supported by Evercore, Deloitte, OC&C, KPMG,
Weil Gotshal & Manges and Sidley Austin on the sale.
For further details:
HgCapital +44 (0)20 7089 7888
Laura Dixon
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 Trust's, HgCapital's,
Zenith's, nor Bridgepoint'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
The company news service from the London Stock Exchange
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