Hg, the Manager of HgCapital Trust plc ("HGT"), today announces an investment in Prophix, a global leader in Corporate Performance Management (CPM) software.
The terms of the transaction were not disclosed.
HgCapital Trust plc will invest approximately £15.7 million in Prophix, with other institutional clients of Hg investing alongside HGT through the Hg Genesis 9 Fund.
HGT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.
Note that these figures only relate to HGTs share of Hg's overall investment in Prophix.
HGT's liquid resources available for future deployment (including all announced transactions and the interim dividend paid in October 2020) are estimated to be £151 million (12% of the 30 September 2020 pro-forma NAV of £1.25 billion, including the increase in equity via tap equity issues over the fourth quarter of 2020). In addition, HGT has access to a £200 million standby facility, which is currently undrawn.
The investment will reduce HGT's outstanding commitments to invest in Hg transactions to approximately £582 million (46% of the 30 September 2020 pro-forma NAV).
Hg invests in Prophix
to continue to scale the business and invest further in product and technology
Mississauga, Canada; New York, USA and London, UK: 6th January 2021 - Prophix, a global leader in Corporate Performance Management (CPM) software, today announces an investment from Hg, a leading global software investor. Hg's investment is expected to accelerate and scale Prophix's growth and fund further development of its product capabilities.
This deal will result in Prophix employees and management participating to acquire the company alongside Hg, who will hold the majority investment. This will allow staff to benefit more directly from the organization's ongoing growth.
Founded in 1987 and based in Ontario, Canada, Prophix is a leading provider of CPM software serving mid-market companies across multiple industries worldwide, providing planning, budgeting and financial reporting software into the 'office of the CFO'. Prophix's software allows organizations to improve their financial reporting capabilities, while also standardizing and streamlining the budgeting process to generate significant ROI through a faster time to close, reduction in budgeting errors and an ability to reforecast in a more agile way. Prophix is a leader in its segment with over 1,600 customers, industry-leading retention rates and best-in-class customer NPS.
Alok Ajmera, Chief Executive Officer of Prophix, said: "Our journey so far has shown us that there is still so much to play for in our industry. We have significant ambitions for the business and Hg's investment and operational experience in software will help us reach these goals. We will look to serve our customers better than ever before, as we invest further in our sales and marketing functions, further our R&D capabilities, accelerate our transition to the cloud and look to scale our business across several regions, including in Europe. Hg has successfully helped businesses to accomplish these goals many times over and we're excited to tap into some of this experience to unlock our full potential."
Paul Barber, Founder and Executive Chairman of Prophix, said: "This is a really momentous announcement for the team at Prophix and we warmly welcome Hg as a key strategic partner today. It has been an incredible journey to date, and I am so grateful to the enormous talent that has seen us get to this stage. Together with Hg we will move forward with an unstoppable team and a very bright future for the business."
This partnership with Prophix reinforces Hg's focus on mission critical B2B software sitting at the intersection of Hg's experience in ERP and Tax & Accounting. This transaction represents Hg's seventeenth investment in this space in the last 16 years, with total invested capital of over $3.5 billion. Prophix is also the fourth software business based in Canada that Hg has invested in over the last 12 months.
Jonathan Boyes, Partner at Hg, said: "Prophix sits right at the heart of a universe that we have been investing in for almost two decades. This means that we recognise high-quality when we see it and Prophix falls firmly into this category. Prophix is a great business run by an impressive team. They have created a best-in-class cloud product that serves a very satisfied customer base, with a huge runway for further growth. We're really excited about joining the team."
Ben Meyer, Partner and co-lead of Hg's New York team, said: "We see significant growth opportunity from the continued adoption of CPM software by mid-market organizations, as the need for real-time financial information and the ability to budget & reforecast in a more agile way becomes increasingly important. Prophix is positioned incredibly well to benefit from this trend, which is a testament to the successful efforts of Paul, Alok and the rest of the Prophix team. We look forward to partnering with Alok and his team to help the company continue to realise its future growth potential."
The terms of the transaction were not disclosed. Advising Prophix on the transaction were Shea & Company as financial advisor and Osler, Hoskin & Harcourt LLP as legal advisor. Advising Hg were Stifel (M&A), Skadden (legal), Kirkland & Ellis (financing), Deloitte (accounting and tax) and EY (commercial and technology).
For further details:
Laura Dixon +44 (0)20 8396 0930
Samantha Chiene +44 (0)207 404 5959
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, HgCapital Trust and Prophix websites are not incorporated into, and do not form part of, this announcement.