Partial sale of Visma among highlights from HgCapital Trust’s interims

HgCapital Trust (HGT), which provides exposure to Hg, Europe’s largest investor in software & service businesses, has this morning reported interim results to 30 June 2020, with NAV and share price total returns coming in at (7.3%). The portfolio ended the period valued at a multiple of  20.6x EV/EBITDA.

Over £250m returned to HGT

Over £250m was returned to HGT (net of carried interest), through the full exits of Evaluate, Citation and Sovos in addition to the partial sale of Visma, all at strong uplifts to book value. The partial sale of Visma was the world’s largest-ever software buyout (we covered this here), valuing the company at US$12.2bn, and represented an uplift of 22% over the Dec-19 book value. HGT note that Sovos was exited at an increase of 55% over the Dec-19 book value and the sale of Citation Group was at an increase of 26% over the Dec-19 book value.

Outlook

We have summarised some of the key points provided by HGT’s manager, HGT:

• “Our companies remain focused on selling business-critical and non-discretionary software and services to their underlying customers, typically with highly predictable business models and robust levels of recurring revenue.
• We expect headwinds from lower global growth in 2020, but believe that the portfolio will, in aggregate, continue to deliver growth over the long-term.
• By the end of June 2020, the S&P500 Software and Services index, which has historically correlated well with our portfolio, was above December-2019 valuation multiples.
• Bolt-ons and strategic M&A within the portfolio remain a key focus and across the current portfolio, we have multiple live M&A situations.
• The combination of the long-term nature of listed private equity investment with the types of business that Hg invests in will continue to drive long-term growth.”

HGT: Partial sale of Visma among highlights from HgCapital Trust’s interims