Hg tops up Visma stake – Hg, the manager of HgCapital Trust has agreed to make a further investment in Visma, a leading provider of business-critical software (mostly through a software as a service or Saas model) to private and public enterprises in the Nordic, Baltic and Benelux regions. Cinven, the global private equity firm, will sell its entire shareholding in Visma as part of this transaction. Terms were not disclosed.
The trust will invest approximately GBP19.5 million in Visma, with other institutional clients of Hg investing alongside through the Hg Saturn Fund, other Hg-managed vehicles, and the Canada Pension Plan Investment Board (CPPIB).
Investment policy breach
Afterwards Hg Capital Trust’s investment in Visma will be about 20.5% (or GBP162 million), of gross assets at 31 March 2019 – baseed on cost. This is 0.5% more than the trust#s investment policy allows. The board says that it “has concluded that this change in the published investment policy for the purpose of facilitating the company’s participation is not material and would be likely to promote the success of the company for the benefit of its shareholders. Furthermore, the board have identified a number of alternative means to bring this holding within 20% in the short to medium term.”
Hg is already the majority owner of Visma, having led the original delisting of Visma from the Oslo Stock Exchange in 2006. Hg has been the lead or co-lead investor in Visma for the last 13 years. Cinven, who first invested in Visma in 2014, sold part of its stake to Hg and co-investors in 2017 and is now selling the entirety of its remaining shareholding in Visma as part of this transaction. The transaction values Visma at an enterprise value of over EUR6.5 billion. Following completion, Hg’s managed funds will own c.63% of Visma, alongside other significant co-investors including GIC, ICG, Montagu and CPPIB.
Nic Humphries, senior partner and head of the Hg Saturn Fund said: “Working closely with Øystein Moan and his team over the last 13 years has been a pleasure. Quite simply they are a world-class team, and great fun to work with. They have built Europe’s leading SMB SaaS business. This is a testament to their technical competence and willingness to invest early and consistently for the long-term in new technologies that, in turn, bring great benefits to their nearly 1 million customers. Hg were able to recognise the potential of SaaS well ahead of most investors because of our longevity and focus on the sector. We are proud to have been by Øystein and Visma’s side every step of the way on this exciting journey for the last 13 years and many more in the future.”
Øystein Moan, CEO and chairman of Visma said: “Hg is Europe’s largest and most consistent investor in software and SaaS businesses over the last 20 years, having led more software deals than any other private investor in Europe. To have a partner with this background is a significant advantage for any management team and this experience has helped Visma on every step of our growth. They have been, consistently, our largest investor over the last 13 years, demonstrating what long-term support really means. I’m delighted that two world-class investors, Hg and CPPIB, have decided to invest further in the company.”
[QD comment: It always makes us uncomfortable when a board bends the rules in this way. Hg has a great track record, however. The breach could be fairly easily rectified if Hg Capital Trust were to raise more money. Alternatively, the trust could sell on part of its stake to another investor.]
HGT : Hg tops up Visma stake