HgCapital makes first US buyout

The London-based private equity firm acquired Sovos Compliance from Vista Equity Partners.

HgCapital has completed its first US buyout by acquiring software company Sovos Compliance from Vista Equity Partners for an undisclosed amount.

Sovos will sit within the firm’s technology, communications and telecommunications services sector. The investment is in line with its approach to invest in global providers of regulatory-driven software, according to a statement.

As part of the deal Vista Partners will retain a significant minority stake in the company.

Sovos provides regulatory tax compliance software to 4,500 clients. The firm is headquartered in Boston and has another two offices in the US, alongside an office in Amsterdam.

In addition to providing capital, HgCapital will be working closely with the management team and Vista to accelerate the growth of Sovos, with plans to make more acquisitions in order to “build a global software champion”, the firm said in the statement.

The deal was made from HgCapital 7, a £2 billion ($2.8 billion, €2.6 billion), 2013-vintage vehicle, which is currently 51 per cent invested.

Despite this being the firm’s first US buyout, HgCapital still has a strong focus on Europe and concentrates on tracking companies in niche subsections, no matter where the location of the head office is, a spokesperson for the firm told Private Equity International.

Golub Capital arranged the financing for the transaction, its fourth for Sovos and the first for HgCapital.

Shea and Company was advisor to both firms in sale.