ICG to exit largest equity investment to Cinven

Cinven has agreed to acquire patent software provider CPA Global for £950m. ICG made its largest equity investment – about £37m – in CPA Global in 2010.

Intermediate Capital Group has agreed to exit its largest equity investment in patent software company CPA Global as part of the £950 million (€1.1 billion; $1.4 billion) acquisition of the company by Cinven. The transaction is subject to regulatory approval and is expected to close in the first quarter.

ICG invested in the company in 2010 with a £45 million mezzanine loan and £37 million of equity, according to an analyst report from Collins Stewart. The sale will generate total proceeds of £387 million for ICG, the firm said in a statement.

“Upon completion ICG will receive total cash proceeds of approximately £113 million. The transaction will result in an additional £43 million capital gain for ICG, which will be booked in the second half of the current financial year,” the firm said in a statement.

Cinven has secured a £430 million debt financing package from HSBC and JP Morgan for the deal, which is split up between £120 million of mezzanine debt and £310 million of senior debt.

“There was considerable appetite for this asset from lenders … the debt package shows that there is still lending available for the right asset and we were able to secure this through our dedicated financing team,” Cinven said.

Cinven is making the investment from its fourth fund, which is almost fully invested, with room for one more transaction, according to a person with knowledge of the firm. The UK-headquartered firm has been raising its fifth fund and is approaching a first close, which is likely to be on about €2.5 billion.

CPA Global’s software services include renewal, search and filing of patents and trademarks, as well as other business support services. Cinven will work to expand the company’s offerings into the Asian market, especially in China, which is expected to see growth of patent renewals.