European mid-market private equity firm HgCapital has agreed two deals in two weeks with a combined enterprise value of up to €305 million.
The firm, which has offices in the UK and Germany, agreed on Tuesday to acquire software business StepStone from Germany-based publishing and media company Axel Springer in a deal valuing the carve-out at €110 million. The current StepStone management team, led by group managing director Matthew Parker, are involved in the deal alongside Hg.
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StepStone’s software is used by businesses to recruit, manage and develop their staff and the company employs more than 400 people in 16 offices. Axel Springer will keep StepStone’s online division.
“Since Axel Springer has set a clear strategic focus on online job boards for StepStone, acquisition of the software division by HgCapital will allow the solutions unit to enter a new phase of expansion under HgCapital’s ownership,” said Jens Müffelmann, head of electronic media at Axel Springer.
Last week Hg acquired a majority stake in JLA, a UK-based supplier of commercial laundry equipment. Financial details were not disclosed, but a source close to the process confirmed the deal valued the business at between £150 million (€167 million; $225 million) and £175 million.
HgCapital Trust, a listed limited partner in Hg’s funds, will invest at least £13.4 million into the StepStone deal. The trust, which has a £280 million commitment to Hg’s sixth fund, “built up significant cash reserves during the peak of the bull of the phase and has been sitting on them throughout the market downturn,” said Henry Freeman, an analyst at Liberum Capital. “Management have been commenting that they are increasingly seeing opportunities to invest and it is pleasing to see they are now executing on deals which should also reduce cash drag.”