H.I.G. books 8x on Zmarta sale

The firm is selling the Nordic fintech marketplace to Bauer Media in a €170m deal.

H.I.G. Capital has agreed to offload Nordic fintech marketplace Zmarta Group to Bauer Media Group in a deal valuing the business at €170 million, according to a statement.

The sale will generate a return on invested capital of more than 8x, the firm said.

H.I.G.’s European arm, H.I.G. Europe, acquired Zmarta, at the time called Freedom Finance, in 2013 using capital from its 2007-vintage, €600 million H.I.G. Europe Capital Partners fund.

Zmarta offers a range of personal financial services to consumers such as personal loans, insurance and credit cards. It also recently launched a personal finance management app.

With a strong presence in the Nordics on acquisition, Zmarta entered the German market in 2015. Today the business employs around 200 people across offices in Angelholm and Stockholm in Sweden, Oslo, Helsinki and Munich, according to its website.

In the statement, Andreas Schoo, a member of the executive board at Bauer Media, said he sees “strong synergies between Bauer Media and Zmarta Group, enabling us to accelerate growth”.

William Blair International acted as exclusive financial advisor to H.I.G. and Zmarta on the transaction.

“This deal represents a vote of confidence in the technology sector and European companies more broadly, regardless of the market volatility that has followed the outcome of the UK EU Referendum,” Raphael Grunschlag, head of European technology at William Blair, said.

“We are seeing a growing demand from strategic and private equity investors for fintech companies in particular.”

H.I.G. Europe, which operates out of offices in London, Hamburg, Paris, Madrid and Milan, is currently investing the 2013-vintage H.I.G. Europe Capital Partners II, which closed above its €750 million hard-cap on €825 million after just three months in market. Larger than its predecessor, the vehicle was significantly oversubscribed from existing H.I.G. investors, Private Equity International reported at the time.

The firm is using the fund for buyouts and growth capital investments in the lower mid-market in Western Europe.

H.I.G. Capital, which has €18 billion of equity capital under management, is also investing two funds in North America, according to PEI Research & Analytics. Its 2013-vintage fifth flagship fund closed on its $1 billion hard-cap, and its 2013-vintage H.I.G. Middle Market LBO Fund II closed on its $1.75 billion hard-cap in February 2014, as reported by PEI.

In January H.I.G. hired two associates in its London office. Richard Dunn joined from Terra Firma Capital Partners to focus on business services, reporting to European business services lead Alastair Mills, and Thomas Yusef joined from Barclays Capital to focus on TMT, reporting to European TMT head Claudia Paniker Rumeu, as reported by PEI.