HgCapital acquires majority stake in Foundry from Carlyle

The London-based investment firm will use capital from its Fund 7 for its fourth commitment in a European software company in the last 12 months

HgCapital has announced that it is investing an unspecified amount from its Fund 7 into The Foundry Visionmongers to take majority ownership from The Carlyle Group.

London-based HgCapital manages investment trust HgCapital Trust, which will contribute about £19.7 million ($30.89 million; €27.76 million) to the deal. This investment marks the fifth commitment from Fund 7, which will now be about 41 percent invested, and will support The Foundry's development of disruptive technologies for creative control and production efficiency.

“Knowing the direction we plan to take The Foundry, we identified that HgCapital was the ideal partner to build on what The Carlyle Group have helped us achieve,” The Foundry chief executive officer Bill Collis said.

HgCapital Fund 7 surpassed its £1.75 billion target when it closed in 2013 on £2 billion. The fund has allowed HgCapital to continue investing in the TMT sector. Specifically, this is the firm's fourth investment in the European software sector in the past year, after its acquisitions of Sequel, Allocate Software and Eucon.

After this investment, which has an enterprise value of £200 million, the Trust's outstanding commitments in HgCapital deals will decrease by 37 percent to about £166 million, according to a statement.

HgCapital currently manages £5.2 billion in assets and has managed seven funds to date, according to PEI's Research & Analytics division. It was established in 2000 as a successor to Mercury Private Equity, which was acquired by Merrill Lynch in 1997.

At the time of publication, HgCapital Trust shares were up 1p, or 0.09 percent, at £10.87, giving it a market capitalisation of £405.71 million.