HgCapital Trust PLC Hg announces the sale of A-Plan Group (8428Z)

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RNS Number : 8428Z

HgCapital Trust PLC

23 September 2020

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces the sale of A-Plan Group ("APG"), one of the UK's largest specialist insurance intermediaries, to Howden, the international insurance broking group. The terms of the transaction are not disclosed and the acquisition remains subject to regulatory approval.

Hg partnered with APG in 2015, recognising the business' best-in-class customer success model - a personal, service-oriented approach, leading to very high levels of customer satisfaction alongside strong organic growth. Since then Hg has worked with management to transform APG from a predominantly branch-based, personal lines insurance broker, to a business with a national footprint across multiple lines of business, supported by industry-leading data and analytics capabilities.

APG has more than doubled its revenues under Hg's ownership and now has 1.3 million policies compared with 600,000 at acquisition. Renewal rates are strong and NPS scores remain exceptionally high and are supported by excellent customer service. APG has also implemented a new cloud IT broking platform, achieving efficiencies and providing data insights to drive new business growth and improve customer retention. APG has also undertaken a significant M&A programme which has led to a more diverse and scaled position in the UK insurance market. Investment in talent across APG's key functions and broad equity ownership across APG's employee base has also been a key driver for growth.

Thorsten Toepfer, Partner at Hg, said: "We would like to thank Carl and the team for the great partnership and exceptional performance over the last 5 years. The company has delivered excellent organic growth, whilst also executing 56 accretive M&A transactions and building an MGA capability.

"Using our technology expertise, Hg has also worked with management to put software and data at the heart of the business which has greatly improved efficiency and performance. The team's biggest achievement, however, has been to maintain A-Plan's strong culture, which has been responsible for its industry-leading customer satisfaction and loyalty, as well as its trusted insurer relationships throughout this period of rapid change."

Carl Shuker, CEO of A-Plan Group, said: "We have had a great journey with Hg, together building on a long-term track record of sustainable growth that we are very proud of. Today we employ over 2,000 staff, a number which has almost doubled during Hg's investment.

"We are delighted by the prospect of working with Howden; it's a business that is so evidently aligned with us on the central importance of looking after its people, clients and insurers but will also support us in M&A as we deliver on Howden's ambition for UK regional insurance distribution."

HGT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

This transaction values HGT's current investment in APG at GBP21.5 million. This would represent an uplift of GBP3.2 million (18%) or 1 pence per share over the carrying value of GBP18.3 million in the Net Asset Value ("NAV") of the Company at 31 August 2020.

Based on the 31 August 2020 pro-forma NAV (including the increase in equity via tap equity issues over the third quarter of 2020), following completion of this transaction the pro-forma NAV of the Trust is expected to be GBP1.16 billion (or 282.9 pence per share). HGT's liquid resources available for future deployment (including all announced transactions and the interim dividend payable in October 2020) are estimated to be GBP311 million (27% of the pro-forma 31 August 2020 NAV).

Note that these figures only relate to HGT's share of Hg's overall investment in APG.

For further details:

Hg

Laura Dixon [phone]

Brunswick

Azadeh Varzi [phone]

About HgCapital Trust plc

HgCapital Trust plc, whose shares are listed on the London Stock Exchange (ticker: HGT.L), gives investors exposure through a liquid vehicle to a portfolio of high-growth private companies in the software and services sector. The selection of new investments and creation of value in these businesses are managed by Hg, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors. For further details, please see www.hgcapitaltrust.com .

The contents of the Hg, HGT, A-Plan Group and Howden websites are not incorporated into, and do not form part of, this announcement.

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September 23, 2020 02:05 ET (06:05 GMT)