HgCapital, the Manager of HgCapital Trust has made an investment in Mitratech, a leading global provider of legal, risk and compliance software serving multinationals and SMEs across Europe and the US. HgCapital will be the lead investor in the new transaction structure, alongside TA Associates and the management team at Mitratech. The terms of this transaction were not disclosed.
HgCapital Trust plc will invest approximately GBP16.4 million in Mitratech, with other institutional clients of HgCapital investing alongside the Company through the HgCapital 7 Fund.
The Company, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital’s investments.
Following completion, approximately GBP170 million of the GBP200 million commitment made by the company in 2013 will have been invested in twelve companies, alongside the HgCapital 7 Fund. In December 2016, the company committed to invest up to GBP350 million in mid-cap companies, with the HgCapital 8 Fund, over the next four to five years. In February 2017, the company committed to invest up to GBP80 million in smaller-cap companies, with HgCapital’s Mercury 2 Fund.
Based on the pro-forma 28 February 2017 NAV, the company’s liquid resources available for future deployment, including all announced transactions, are estimated to be GBP83 million (13% of the pro-forma 28 February 2017 NAV of GBP625 million). In addition, the company has access to an GBP80 million standby facility, which is currently undrawn. The transaction will reduce the company’s outstanding commitments to invest in HgCapital deals over the next four to five years to approximately GBP483 million.
Founded in 1987, Mitratech offers mission critical enterprise legal management (“ELM”) and enterprise risk management (“ERM”) software; its flagship product offering is a sector leading and award-winning legal matter management and spend management platform for large corporate legal departments, enabling customers to manage their internal workflows, documents (“system of record”), deadlines and communications, as well as providing an e-billing solution to collaborate with external legal advisors on budgeting and invoicing. Today the company provides legal, compliance, and operational risk solutions to 1,200 corporations across the globe with more than 500,000 users in over 160 countries. Its operations are supported by offices in the US, UK, and Australia.
This investment by the HgCapital TMT team follows many years of experience in the regulatory-driven business software space. Mitratech demonstrates many of the business model characteristics that HgCapital looks for, including: a business-critical product; a high proportion of repeatable revenues; strong customer loyalty; an opportunity for M&A; and a strong management team with a proven track record in both organic and M&A-led growth.
“We are delighted to be working with Jason Parkman and his talented management team, alongside TA Associates,” said Jean-Baptiste Brian, a Director in the HgCapital TMT team. “HgCapital has a strong track record of successful investments in regulatory compliance-driven software companies. We are impressed with the excellent progress Mitratech has made in establishing itself as a global player in this sector, and we look forward to supporting their continued growth going forward.”
“TA Associates has been a strong partner for us over the past 18 months, and an important part of our unprecedented recent growth. We look forward to continuing this relationship for years to come,” said Jason Parkman, Mitratech CEO. “Our new partnership with HgCapital brings us additional strength to fuel our growth in legal and risk management generally, as well as the focus to accelerate our current momentum of international expansion. The combination of these two strategic investors provides more access to global resources and enables us to invest even more to deliver innovation and value for our clients.”
“Since forming our strategic partnership with Mitratech in September 2015, it has been a pleasure to partner with Jason Parkman and his team,” said Hythem El-Nazer, a Managing Director at TA Associates. “The business has more than doubled during our partnership and, more importantly, Mitratech has solidified itself as a leader in the Enterprise Legal and Risk Management software market. We look forward to continuing to support Mitratech and partnering with HgCapital as the business continues to expand globally.”
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