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HgCapital has today announced the sale of Epyx to Fleetcor, a US-based fuel payment processing business listed on the NYSE.  This realisation represents a multiple of up to 2.7x original cost and a gross IRR of c. 27% (which includes funds returned to clients from a series of dividends in 2012 and a recapitalisation of the business earlier this year).

Epyx is a pure cloud business, providing a private electronic marketplace serving vehicle fleet operators in the UK. Epyx’s services enable customers and suppliers in this industry to reduce costs and increase efficiency across multiple business processes, via a marketplace which connects UK’s vehicle fleet operators and 9,000+ suppliers of critical services to these fleets.

HgCapital identified Epyx as a business with high levels of recurring revenue and attractive top-line growth. After tracking the opportunity for a number of years, HgCapital completed its investment in Epyx in 2009.  During HgCapital’s investment period, Epyx continued to deliver strong organic growth, with revenue and EBITDA CAGR of 14% and 18% respectively.

Epyx represented HgCapital’s second investment in the electronic B2B network sector, following the HgCapital 5 Fund’s acquisition of Achilles (acquired in 2008). In-line with HgCapital’s sub-sector focus, a third investment was completed through the acquisition of Valueworks in November 2012 from HgCapital’s lower mid-market focused Mercury TMT Fund.

Epyx represents the fourth realisation from the 2009 vintage HgCapital 6 Fund, and follows the recent sale of Services investment ATC in August, to Blackstone-backed Intertrust (delivering 2.3x original cost and a c. 40% gross IRR). The Fund has averaged 2.8x original cost and generated a gross IRR of approximately 45% from these four exits, and will have returned c. 42% of invested capital to the Fund’s clients.   The sale of Epyx also represents the 18th achieved by HgCapital since the onset of the financial crisis in the autumn of 2008.

Greg Connell, Founder & CEO of Epyx, said:

“HgCapital’s knowledge of the sector, straightforward working style and focused approach combined with their significant support of the management team to help us deliver growth and identify exit opportunities has been a key part of the Epyx success story.”

HgCapital and the management shareholders of Epyx were advised on the sale by the corporate finance team at PwC, with legal advice provided by Linklaters and DLA Piper.