HgCapital has today announced the sale of SiTel Semiconductor (“SiTel”), the Netherlands-based producer of products targeted primarily at the home wireless voice and data applications market, to Dialog Semiconductor Plc for an enterprise value of $86.5 million. This is HgCapital’s 35th realisation over the last five and a half years, representing an overall investment multiple of 2.6x original cost and a gross IRR of over 30%.

This transaction follows HgCapital’s majority realisation of Nordic SME software provider Visma in September 2010, which represented a total return of 3.7x original cost to investors. A consistent, thematic approach to targeted sub-sector TMT investing has delivered seven realisations averaging more than 3x cost and 46% IRR since 2006, with no single TMT exit delivering an investment return of less than 2.1x cost. Since 2001, buyout investments completed by HgCapital’s dedicated TMT sector team have returned more than £800 million in realised proceeds to clients and have resulted in the aggregate creation of more than 4,000 new jobs during HgCapital’s period of ownership. HgCapital acquired the cordless business unit of the National Semiconductor Corporation, known as SiTel, in June 2005. HgCapital has worked closely with SiTel’s management to establish the business as a strong, independent entity supporting expansion into areas such as “Voice over Internet Protocol” (VoIP) chips and gaming peripherals. The business was subsequently able to perform strongly throughout the downturn, with EBITDA increasing by over 61% between 2008 and 2010.

Commenting on the realisation, Nick Turner, a Partner with HgCapital, stated:

“It has been a pleasure working together with Asmund Tielens and his management team. SiTel is a high quality business with a leadership position in its core market; and, not for the first time, we have seen the rewards for backing such a business with increased research and development spending to accelerate its growth. We are pleased to see it become part of a group which will allow the team to continue to build on this success.”

Nic Humphries, CEO of HgCapital said:

“The sale of SiTel supports HgCapital’s established track record for successful sub-sector, thematic investing in the TMT space. Our performance in this sector indicates that we are very well positioned to continue building a compelling competitive advantage within the European TMT market.”

HgCapital and SiTel were advised in this transaction by Mooreland Partners.