HgCapital, the Manager of HgCapital Trust has announced that it has sold Intelliflo, a Software as a Service (‘SaaS’) business for UK financial advisors, to Invesco, the global investment management company. The terms of the transaction have not been disclosed but it reportedly values HgCapital Trust’s investment in Intelliflo at approximately £16.8m. This company says that this would represent an uplift of £6.7m (66%) or 18 pence per share over the carrying value of £10.1m used in HgCapital Trust’s NAV as at 30 April 2018.
The announcement by HgCapital Trust notes the following:
- Transaction is the sixth realisation achieved by the Hg Mercury 1 fund.
- Mercury 1 fund now has a gross realised fund multiple of 3.4x original cost and 44% gross IRR.
- Represents the 16th realisation across all Hg funds in the last 18 months – returning over £3 billion in aggregate.
About Intelliflo
Intelliflo is a UK provider of front and back‑office software solutions to financial intermediaries, including IFAs, wealth managers, adviser networks, insurance/life companies and brokers. Intelliflo’s Intelligent Office (“iO”) software platform is the backbone of the UK wealth sector, assisting financial advisors across the full advice journey – including client relationship management, financial planning, client reporting, portfolio valuation and provision of advisor-led automated advice.
Hg invested in Intelliflo in 2013
Hg partnered with Intelliflo in 2013, in line with its strategy to invest in leading recurring revenue vendors in the financial services software sector. Over the past five years, Hg has supported the company to implement best in class SaaS practices in development, operations, sales and marketing – under the leadership of Nick Eatock, founder, and Hamish Purdey, CEO. The company has experienced a material acceleration of revenue growth in this period and has become the leading technology platform for financial advisors in the UK, successfully supporting the business of around 30% of UK financial advisors.
£200m of liquid resources available for deployment
Based on the 30 April 2018 reported NAV (including all transactions announced to date and the resulting revaluation of the carried interest provision), the pro-forma NAV of the Trust is expected to be £742.6 million (or 1,989.6 pence per share). The Company will realise estimated cash proceeds of approximately £13.1 million on completion of this transaction, after allowance for a payment of carried interest to the Manager. The Company’s liquid resources available for future deployment (including all announced transactions) are estimated to be £200 million (27% of the pro-forma 30 April 2018 NAV). In addition, the Company has access to a £80 million standby facility, which is currently undrawn.
Sixth realisation by Hg Mercury 1 fund
This is the sixth realisation achieved by the Hg Mercury 1 fund, which has now a gross realised fund multiple of 3.4x original cost and 44% gross IRR. The sale also represents the 16th realisation across all Hg funds in the last 18 months, which have in aggregate returned over £3 billion to clients.
About HgCapital Trust
Established in 1989, HgCapital Trust is an investment trust listed on the London Stock Exchange. The Trust’s objective is to provide shareholders with long-term capital appreciation in excess of the FTSE All-Share Total Return Index by investing in unquoted companies. HgCapital Trust is managed by HgCapital, a private equity firm targetting middle-market buyouts across the technology, media and telecommunications (TMT), services, and industrials sectors, primarily in the UK and Continental Europe.
HgCapital Trust sees 66% uplift on sale of Intelliflo to Invesco : HGT