News

Hg agrees the sale of Foundry

18/03/2019 Hg today announces the sale of Foundry, a leading global developer of high‑end visual effects (“VFX”) and 3D design software to Roper Technologies (NYSE: ROP), a leading diversified technology company for £410 million in cash. Foundry provides award-winning creative software for film post‑production visual effects with its Nuke product range and a series of complementary products. Foundry’s Digital Design products offer advanced 3D modelling, visualisation and design variation capabilities to designers and artists across a broad range of industry verticals including footwear and apparel. With Athera, Foundry is the first company to offer a fully cloud-based solution for the VFX industry with software, compute, storage and rendering capabilities. Foundry enables clients like Pixar, ILM, MPC, Walt Disney Animation and Weta Digital as well as automotive, footwear, apparel and technology companies such as Mercedes, New Balance, Adidas and Google to turn incredible ideas into reality, by solving complex creative challenges. Foundry was founded in 1996 and is headquartered in London, with offices in Manchester and Austin. It has more than 6,000 customers in over 100 countries and employs c.300 people. Hg invested in Foundry from the Hg7 fund in 2015, recognising the company as a leading global provider of vertical market application software, with rich intellectual property, strong positioning within its business segments and the potential to enter new market segments. Hg has worked with the company’s management team to broaden Foundry’s go-to-market strategy, invest in its cutting-edge product offering across Media & Entertainment and accelerate the growth of the company’s Digital Design division. Nic Humphries, Senior Partner at Hg, said: “Foundry is a business with a 20-year history of growth and innovation. Hg has built on the company’s strong development capabilities to drive enterprise adoption of the Digital Design offering and pioneer revolutionary new products such as Athera. We’ve enjoyed working with the team over the last 4 years and wish the team well as they continue their growth journey as part of Roper Technologies.” Craig Rodgerson, CEO, Foundry said: “Hg has been a great partner to Foundry over the last few years, helping us to evolve from a number of category-leading products into a truly cloud-enabled platform positioned for growth across industry segments and geographies. We look forward to partnering with Roper Technologies to continue our ambition to be the leading provider of software to professional users in creative industries.” Foundry was advised on this transaction by Arma Partners, Skadden and Deloitte.

February Highlights

04/02/2019 Welcome to our program of monthly digests, designed to keep you updated with news from Hg and our network of portfolio companies. If you would like to subscribe, please email us. Catch up here  

Hg Invests in Transporeon Group

29/01/2019 Hg today announces that it has invested in Transporeon Group (“Transporeon” or “the Group”), one of the world’s leading cloud-based logistics platforms. TPG Capital (“TPG”), the global private equity platform of alternative asset firm TPG, exits its shareholding in Transporeon as part of the transaction. Terms are not disclosed. Founded in 2000 and headquartered in Ulm, Germany, Transporeon is a cloud-based logistics platform with strong network effects, connecting a global network of over 1,000 shippers and almost 90,000 carriers, enabling them to source, communicate, collaborate and transact more efficiently, whilst also helping to lower CO2 emissions by up to 10% through the reduction of empty cargo trucks (backhauls). Transporeon serves a global blue-chip and European enterprise customer base and Europe’s leading carrier network with more than 100,000 users across 100 countries, who use the Group’s software-as-a-service solutions and platform, which is available in 24 languages, for freight sourcing, carrier assignment, time slot management, visibility and market intelligence. Transporeon employs 600 people in nine locations around the world. The investment, which will be made from the Hg8 fund, recognises Transporeon’s attractive business model characteristics, strong financial profile, highly experienced management team and leading position in leveraging the continuously growing network effect. The transaction represents another example of Hg’s focus on cloud-based software and network companies, providing software-as-a-service (SaaS) solutions to the business community. Stefan Margolis, Justin von Simson and Jean-Baptiste Brian at Hg, said: “We have been tracking Transporeon for many years. We believe that it is a very unique platform, with significant further organic growth potential, at the forefront of freight industry digitalisation. Using its cloud-based technology solutions, Transporeon helps to reduce complexity and increase efficiency, in what is still a highly inefficient, large, fragmented global logistics market.” Marc-Oliver Simon, co-founder and CEO of Transporeon said: “We'd like to thank TPG for their commitment and significant contribution over the past three years. We are excited to work with Hg, tapping into their deep experience and track record in working with technology companies, to help us achieve our vision around the digitalisation of the freight industry, whilst also delivering the best solutions for our customers and global network.”

Hg succeeds Waterland as investor in Combell Group

21/12/2018 Hg today announces that it has agreed to invest in Combell Group (“Combell”), a leader in mass hosting services for SMEs across Europe. Waterland Private Equity exits its shareholding in Combell as part of the transaction. The transaction is subject to regulatory approval and so will close in the New Year.  Terms of the transaction are not disclosed. Established in 1999, Combell is a leading mass hosting player in Belgium and Denmark, and has growing positions in the Netherlands, Sweden and Switzerland. Combell has over 800,000 SME and SoHo customers and is a one-stop partner for web hosting, domains, e-commerce and application solutions. The investment represents Hg’s 8th investment in the technology services sector, with other recent hosting investments including Zitcom (2015), DADA (2017) and most recently, IT Relation (2018).  Combell shows similar characteristics to these businesses, having consistently delivered strong organic revenue growth, best-in-class customer satisfaction metrics and an exceptional M&A track record. Nick Jordan, Partner, and Joris Van Gool, Director at Hg said: “We have been very impressed with what the team at Combell have built over the past 19 years in the Benelux and the Nordics. It’s a privilege to invest alongside CEO Jonas Dhaenens and the entire management team. We have been following Combell for a long time and believe that the business is strongly positioned to continue growing organically while adding selective M&A on its platform. We look forward to partnering with the Combell team as the business continues to expand across Europe.” Jonas Dhaenens, Founder & CEO, Combell Group: “I am excited about the opportunity to partner with Hg in the next phase of Combell’s growth and development.  We look forward to working with Nick Jordan and the rest of the Hg team to grow a true industry champion. I would like to sincerely thank and congratulate Waterland for their tremendous support throughout the last 5 years; this incredibly successful ride would simply have been impossible without their unrelenting strategic guidance, operational support and buy & build execution power.” Cedric van Cauwenberghe, Managing Partner, Waterland: “Our partnership with the Combell team has delivered an exceptional result, driven by the company’s international buy-and-build expansion  strategy. Together with management we have grown the business more than tenfold in the last 5 years through consistent organic growth and 17 bolt on acquisitions, creating a leading position for Combell in Europe. We want to thank Jonas and the team for the great collaboration in the past years and wish them the best of luck in continuing this successful growth trajectory.”

Megabuyte50 Awards honour Commify, Foundry, Access Group, IRIS, FE & Allocate Software

22/11/2018 The 2018 Megabuyte50 awards, honouring the UK's best-performing, mid-market ICT Services and Software companies, were announced on Tuesday and featured six UK software businesses, currently backed by Hg. Read the full report here. A record for Hg, the six named companies place Hg as the top technology and software investor in the 2018 list, with more portfolio companies featured than any other investor for the second year running. The companies' performance is scored using Megabuyte’s proprietary Scorecard benchmarking methodology which assesses companies against seven sustainable growth-related KPIs. Companies are awarded a Scorecard rating (a mark out of 100) and then ranked against their peers. Access Group, Allocate Software, FE and IRIS all placed in the 50 while Commify (MB profile) and Foundry (MB profile) were also named as ‘Best Performing Company’ in their respective categories (Mobile, Wireless and Satellite and Specialist Applications). All six are application software businesses and represent ‘sweet spot’ characteristics that Hg looks for in all of our investments. Hg’s team of 50 technology focused investors and operating partners represent the largest and most experienced in Europe, reinforcing Hg’s position as #1 software & tech-enabled services investor across Europe & one of the top 5 globally. Matthew Brockman, Managing Partner of Hg, said: “It is fantastic to see the continued success of Foundry, Commify, IRIS and Access, all of whom featured in last year’s list.  It is greater still to see Allocate and FE honoured for the first time. Hg’s portfolio past and present has always been well-represented on the MB50, with recent Hg exits, Sequel and Intelliflo, appearing alongside our current investments. Technology is an attractive and fast-growing sector and the fact that all of our eligible portfolio companies feature this year is a testament to our scale and capability in UK software and tech-enabled services technology.” About Megabuyte Megabuyte is an independent research provider servicing the UK's leading technology sector CXOs, investors and advisers. We deliver expert, independent and strategically actionable insights addressing the financial and corporate affairs of some 600 of the UK’s key public and private technology companies in the ICT Services and Software sectors. A combination of our proprietary content, rigorous analytics and deep domain experience make our research and opinions highly sought after by those seeking incisive and unvarnished intelligence and insights. Our research is available on-line, through subscription or pay-as-you-go, or on a retained or ad-hoc consultancy basis. The megabuyte50 award series identifies the Top 50 best-performing, privately-owned mid-market companies in the UK’s Software and ICT Services sectors.

Hg announces final closing of Hg Saturn 1 Fund at £1.5bn

22/10/2018 Hg Saturn 1 Fund (“Saturn”), a software‑focused, large‑cap buyout fund raises a total of £1.5 billion; Saturn to invest in software companies valued at an enterprise value of over £1 billion; Saturn fund 40% invested via two of the largest ever private equity led software buyouts in Europe: Visma and IRIS; Continues Hg’s position as number 1 investor and owner of technology businesses in Europe; Hg’s software investments have delivered realised returns of 2.8x gross MoC and 37% gross IRR across last 15 years. 22 October 2018: Hg is pleased to announce that it has held a final close on the Hg Saturn 1 Fund (“Saturn”), a software‑focused, large‑cap European buyout fund, at its hard capitalisation raising a total of £1.5 billion. Saturn is a natural extension of Hg’s technology focus, from which the firm’s success and broad networks have created a leading position, right at the heart of the European technology market.  The objective of Saturn is to invest in companies valued at an enterprise value of approximately £1 billion and above, with equity requirements in excess of £500 million, behind the same technology business models into which Hg already invests through its existing Funds, principally Hg8 and Mercury 2. Hg’s team of 50 technology focused investors and operating partners is the largest and most experienced in Europe and, over the last 20 years, Hg has become the leading investor and owner of Software-as-a-Service and application software businesses in this region, having led or co-led 9 out of the top 20 largest European software buyouts. Today, combining the revenues of Hg’s technology investments, would make its software portfolio equivalent to the third largest software company in Europe. Deep domain knowledge of the tech and software sector enables Hg to derive greater growth and value creation in the companies they partner with. As a result, during the last 15 years, Hg has acquired technology businesses with more than £10 billion of enterprise value, investing in over 45 technology buyouts and more than 100 bolt-on acquisitions. Hg has delivered realised returns for its software investments of 2.8x gross MoC and a 37% gross IRR. Saturn received strong support from existing Hg investors, as well as those making their first commitment to Hg. Having held a first close earlier in the year, the Saturn Fund is now currently 40% invested across two high quality businesses: Visma (£4.4 billion buyout in 2017) and IRIS (£1.3 billion buyout in 2018). The closing of Saturn follows a period of significant activity from Hg since the start of 2017, during which time the investment teams have completed 15 investments and 19 realisations, which have returned total proceeds of more than £3.2 billion to investors. Nic Humphries, Senior Partner at Hg and Head of the Hg Saturn Fund, said: “The secular growth of the software industry is one of the most important and persistent features of the modern economy and enables us to build better businesses across many different sectors. Saturn is an important strategic addition to Hg, since it provides us with ubiquity to invest everywhere from small to very large software businesses in Europe. We are pleased that the businesses we back provide great returns for our investors, whilst at the same time growing employment in knowledge-economy jobs in the UK and Europe.  We are also delighted to bring on board a high quality group of investors that have supported the Fund and we thank our clients for their support.” Software now accounts for c. 15% of corporate capex today, versus c. 5% in the early 1990s. End-user spending on software is expected to grow at an 8.5% CAGR (2016-2021) from an already high, and increasing base. Nearly 100,000 software and technology services companies are expected to be operating by 2021, worth over $7.5 trillion enterprise value in total, according to the research firm Gartner. This growth has driven the increased incidence and size of large-cap software companies, from c. 150 to c. 350 in the last 10 years. Proskauer provided legal advice and Rede Partners advised on the fundraising.