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HgCapital has today announced the intended sale of Mondo Minerals (“Mondo”), the world’s second largest talc producer, to Advent International Corporation, subject to carrying out the required employee consultation obligations. HgCapital originally invested in Mondo in 2007 and the sale is anticipated to complete in the next four months.

Mondo is a leading international producer of high-performance talc with a leading European market position. The Company is the supplier of choice for paper, paints and coatings and plastics applications and also has a growing presence in a range of niche end-markets including ceramics, food and personal care.

The sale of Mondo will represent HgCapital’s fifth realisation over the last twelve months leading to an anticipated return for these five realisations of approximately 3.2x combined gross original cost and an IRR of c. 24%. HgCapital has clearly demonstrated with this transaction and other divestments since the start of the credit crunch in September 2008 that it can generate strong risk-adjusted returns across the economic cycle.

During HgCapital’s period of ownership, Mondo has delivered EBITDA growth of approximately 50% and increased employee headcount by 12% despite challenging trading conditions throughout the recession. This performance provides another example of HgCapital’s commitment to investing in platform businesses with the potential for growth and performance improvement.

Since 2007, HgCapital has actively supported Mondo’s management in implementing a number of initiatives including: repositioning the business with a strong focus on high-margin end-markets; broadening its geographic footprint into markets outside Northern Europe; refocusing the commercial offering on direct sales to customers; enhancing the processing capabilities; and optimising the Company’s cost structure.

Commenting on the realisation, Joachim Drees, a Partner at HgCapital, stated: “Working closely with the management team HgCapital has helped Mondo achieve strong operational and financial performance over the last three years despite the global recession. The business has delivered significant growth, strong cash conversion rates and has an excellent platform for future growth.”

Nic Humphries, CEO of HgCapital, said: “Mondo is a good example of how HgCapital can make a significant contribution to the development of a niche business with significant global potential.  Growth opportunities exist in Asia and in South America and the business already has a clear strategy to maximise these new markets.”

HgCapital is advised in this transaction by Lazard & Co., Limited, Millington Advisory Partners and Clifford Chance.

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