Private Equity News & Analysis

HgCapital makes 2.2x in two years on ATC

Following the €303m sale of the Dutch business, the UK-based firm will have returned more than 40% of its previous fund's invested capital to LPs.

-

HgCapital has agreed to sell ATC, an Amsterdam-based management and administration business, to Intertrust for €303 million. 

The divestment, which is expected to complete in September 2013 following regulatory approval, will generate a 2.2x return and a gross IRR of 37 percent, according to a statement. 

HgCapital only owned ATC for a little over two years: it made its initial investment in March 2011, using HgCapital 6, a €1.7 billion fund closed in 2009. 

ATC provides management and administration services to multinational corporations, financial institutions and fund managers. Under Hg’s ownership, ATC increased its sales team and improved its internal training and development programme. In the last two years, ATC has grown organically with revenues up 11 percent and EBITDA up 14 percent per annum.    

The sale of ATC represents the third exit from HgCapital 6 and Hg's fourth exit in the last 12 months. In March, the firm sold Computer Software Holdings (CSH) to Advanced Computer Software for £110 million. In August last year, it sold UK pharma company Mercury Pharma to Cinven, netting a 4x return. And a month prior to that, it sold SHL, generating a 3.1x return. Following this latest sale, HgCapital 6 will have returned over 40 percent of its invested capital to LPs. 

“We had a simple investment thesis of focusing on higher value corporate clients and supporting accelerated organic growth through investment in sales resource and training. Strong execution from the industry’s leading management team means we have seen a real acceleration in both revenues and profits in our ownership period,” Matthew Rourke, head of the services team at HgCapital, said in the statement. 

The exit of ATC comes after the firm finished raising HgCapital 7, which closed in April on its £2 billion hard-cap. Like the previous fund, this new vehicle will focus on investments with an enterprise value in the range of £20 million to £500 million in the healthcare, industrial, services and TMT sectors.