HgCapital has today announced the sale of SLV Group (“SLV”), one of the fastest growing providers of innovative lighting products and systems in Europe, to Cinven.

This is HgCapital’s 36th realisation since the summer of 2005, representing an overall investment multiple for these 36 transactions of 2.5x original cost and a gross IRR of over 30%.  It is also HgCapital’s third transaction in the German market since the start of 2010, following the acquisition of SimonsVoss Technologies AG in May, and the acquisition of Teufel Speakers GmbH in June 2010.  Following this realisation, HgCapital 5 will have returned c. 75% of all invested capital.

SLV, based near Aachen, Germany, employs approximately 190 people in Germany, and has subsidiaries and associates in Germany, France, Italy, Belgium, Switzerland, Hong Kong, the US and Russia. SLV has evolved into one of the most successful European providers of lighting systems.

Under HgCapital’s stewardship, SLV has achieved growth well above the industry average, and performed strongly during the economic downturn. This success has been driven by SLV’s strategy of combining the technical expertise required for development of innovative lighting systems in Germany, with the cost advantages derived from manufacturing in emerging markets, a highly efficient logistics operations and an extensive multi-channel distribution system based on strong partnerships.

Over the last four years, HgCapital has taken a pro-active approach to the management of SLV, progressing a number of initiatives including strengthening the management team by introducing a new CFO to the Board; developing the Group’s international operations, including the establishment of SLV North America in 2009; acquiring a majority stake in SLV’s distribution partners in France, Switzerland, Italy and Belgium; and investing in the expansion of SLV’s logistics capabilities.

Commenting on the realisation, Justin von Simson, a Partner at HgCapital, stated: “SLV is a very good example of how HgCapital can add significant value to an already successful growth business and German “hidden champion”. It has been a pleasure working with SLV’s management team to help develop SLV’s international presence, distribution and logistics capability and its profitability. The business is now well positioned for the next stage of its development.”

Nic Humphries, CEO of HgCapital, said: “This transaction is further proof of our ability to establish robust growth-oriented partnerships with successful family-owned companies and re-enforces the success of our sub-sector focused, thematic investment strategy.”

HgCapital was advised in this transaction by Macquarie Capital Advisers Germany.