HgCapital : Mercury Fund sells Relay Software to Applied Systems

09 Aug 2016

HgCapital, the Manager of HgCapital Trust plc ('The Trust'), has announced that it has sold Relay Software, a leading provider of software to insurance brokers, underwriters and insurers in the Republic of Ireland, to Applied Systems, the leading global provider of cloud-based insurance broker management software.

The Trust, the listed investment trust which participates in all HgCapital's investments alongside its institutional clients, will realise cash proceeds of approximately £4.0 million on completion of the transaction. This represents an uplift of £1.7 million (73%) over the carrying value of £2.3 million in the Net Asset Value ('NAV') of the Trust at 31 May 2016 which was based on the Directors' valuation as at 31 December 2015.

Based on the 31 May 2016 reported NAV (including all announced transactions), the pro-forma NAV of the Trust is expected to increase to £523.3 million or 1,402.1 pence per share. The Trust's liquid resources available for future deployment are estimated to be £38.8 million (7% of the pro-forma 31 May 2016 NAV).

The investments within the Trust portfolio were last valued at 31 December 2015. The Trust's 2016 interim results, including the re-valuation of the portfolio as at 30 June 2016 will be announced on 12 September 2016.

HgCapital's Mercury Fund sells Relay Software to Applied Systems

• Transaction marks inaugural exit from HgCapital's specialist lower mid-market TMT fund.
• The £380m Fund made its first investment in 2012; had nine investments in its portfolio prior to today's realisation and has already completed four recapitalisations within the portfolio to date, returning capital to investors

09 August 2016, London: HgCapital is pleased to announce that it has sold Relay Software, a leading provider of software to insurance brokers, underwriters and insurers in the Republic of Ireland, to Applied Systems ('Applied'), the leading global provider of cloud-based insurance broker management software.

HgCapital partnered with Relay Software in early 2014, representing the third investment for Mercury, HgCapital's specialist lower mid-market TMT fund. This exit marks the first full realisation for the Mercury fund, following four prior successful recapitalisations across the portfolio.

Founded in 1985, Relay Software has since grown to become one of the leading providers of technology to the insurance industry in the Republic of Ireland. With a skilled staff of 92 based in its offices in Belfast and Dublin, Relay enables the insurance broker channel in Ireland with its leading technology solution: a seamless front and back office solution which, supported by Relay's excellent customer service, provides its broker customers with the tools that they need to manage a successful insurance business. Additionally, the company also provides software solutions to many of the largest insurance and underwriting firms operating in the Republic of Ireland.

During HgCapital's ownership period, Relay delivered 14% revenue CAGR (FYE January 2014 - 2017F), driven by new customer wins and an expansion into complementary adjacent customer segments such as Commercial Insurance and Wealth Management. HgCapital supported the business' management team on a number of initiatives including investing in new product offerings, improving operational capabilities and delivering accretive bolt-on M&A. The company has also grown from 71 to 92 employees in the same time period.

Reid French, CEO of Applied Systems said: 'The acquisition of Relay Software represents the continuation of Applied's international growth strategy and provides us with a leadership position in the Irish insurance market. Together, Applied and Relay will be able to offer a broader software solution set to brokers and insurers throughout Ireland. I would also like to welcome the talented employees of Relay who built a great business to Team Applied.'

Alastair Bell, Managing Director of Relay, said: 'We are very pleased with what we have achieved with the active support of HgCapital throughout our partnership. With Applied we see a strong future for Relay's customers and staff going forward. This is a great fit for both companies, and we look forward to joining Team Applied.'

David Issott, Director at HgCapital, said: 'HgCapital is proud to have partnered with Relay since 2014, when we identified a successful technology leader in its segment that provided a first class service to its customers with a best in class product offering. The Mercury Team is delighted to have worked with Relay's experienced management team, to support the growth of the business and invest in enhancing further their technology solutions. This is a strong base from which Relay can continue to grow under new ownership and we are glad to have found the ideal future partner in Applied.

'HgCapital's Mercury Fund continues to identify and invest in exciting growth technology businesses throughout Europe. We are also increasingly encouraged and excited by the strong growth generated across our portfolio of investments, and to have now completed the first full realisation from the Mercury Fund.'

- Ends -

For further details:

HgCapital
Laura Dixon
+44 (0)20 7089 7888

Maitland
Tom Eckersley
+44 (0)20 7379 5151
Jamie Dunkley/ Seda Ambartsumian
+44 (0)20 7379 5151

About HgCapital Trust plc

HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange (ticker: HGT.L). The Trust is a client of HgCapital, giving investors exposure to a portfolio of high-growth private companies, through a liquid vehicle. New investments and existing portfolio companies are managed by HgCapital, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors. For further details, please see www.hgcapitaltrust.com.

Neither the contents of HgCapital Trust's , HgCapital's, Relay Software's, nor Applied Systems' websites nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.

About Applied Systems

Applied Systems is the leading global provider of cloud-based software that powers the business of insurance. Recognised as a pioneer in insurance automation and data exchange between brokerages, insurers and their clients, Applied is the leading global provider of agency and brokerage management systems, serving customers throughout the United States, Canada and the United Kingdom. By automating the insurance lifecycle, Applied enables millions of people around the world to safeguard and protect what matters most.

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