HgCapital announced today a majority investment in Raet, a leading HR solutions provider, specialised in HR cloud software and services. Raet will sit within HgCapital’s Technology, Media & Telecommunications (“TMT”) sector. HgCapital will assume majority ownership from CVC Capital Partners and will be investing alongside the management team, who will retain a significant minority stake in the Company. The terms of this transaction were not disclosed.
Headquartered in Amersfoort, the Netherlands, Raet is a leading provider of HR cloud software and services, serving more than 10,000 customers internationally. The Company is in the process of expanding its international footprint in both Europe and South America and currently employs more than 1,000 staff. HgCapital has followed Raet closely for more than 5 years, building a strong relationship with the new management team, and will now work closely with them to accelerate Raet’s robust organic growth.
This investment represents a continuation of HgCapital’s theme of investing in leading payroll and HR-related businesses and follows prior investments in P&I, as well as Visma’s and IRIS’ payroll divisions. Raet demonstrates many of the business model characteristics that HgCapital looks for including: high levels of recurring revenue; high cash flow generation; strong customer loyalty and a strong management team. The investment is another example of the close cooperation between our teams, as with P&I, the Munich and TMT team worked closely together on the transaction, sharing resources and knowledge from prior transactions in this space.
Justin Von Simson, Partner and Head of the Munich office, said, “We have known and tracked Raet for a number of years. The business has a fantastic position in the Dutch market and we have been greatly impressed by the new management team who have been spearheading the development of Raet beyond its home markets to a wider international audience since 2014. We are excited by the opportunity to support the team in these endeavours going forward”.
Ed Wielechowski, a Principal in the HgCapital TMT team, commented, “We are very pleased that Kobe and his team chose HgCapital as their new investor. Raet has an opportunity to become a leading global provider of broad HR cloud software and services over the next few years and we will support this through our deep TMT sector expertise”.
Kobe Verdonck, CEO of Raet commented, “We are delighted to be partnering with the HgCapital team as we take our business forward with the vision of achieving sector leadership across HR software and HR services”.
In addition to investments made from both the HgCapital 7 and the Mercury funds over the past year (including most recently, Sovos Compliance, Citation, Kinapse and Trace One), HgCapital has realised c. £822 million in the last twelve months, both through full and partial exits (TeamSystem, SimonsVoss, Casa Reha and JLA) and through recapitalisations (P&I, JLA, Zenith, IRIS, Sequel and Relay).
HgCapital was advised on this transaction by Nielen Schuman, White & Case, OC&C and Deloitte.