Member Article

Software development company The Foundry secures majority investment

HgCapital Trust has announced a majority investment in The Foundry, a visual effects software development company based at Golden Square, London.

HgCapital Trust will invest in The Foundry alongside other institutional clients of HgCapital, who will participate through the HgCapital 7 Fund.

The Trust, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital’s investments. The Trust will contribute a total of approximately £19.7m.

Under the terms of the deal, HgCapital will assume majority ownership from The Carlyle Group for an enterprise value of £200 million.

The acquisition of The Foundry represents the fifth investment by the HgCapital 7 Fund, and following completion, the Fund will be approximately 41% invested.

HgCapital will work closely with the management team to help the business accelerate its high rate of organic growth, in particular the ongoing development of disruptive technologies driving creative control and production efficiency.

HgCapital will also work with The Foundry to potentially engage in value accretive M&A to support the business and its management in building a global software champion.

The Foundry is the fourth investment by HgCapital funds in the European software sector in the past year, following the acquisitions of Sequel, Allocate Software and Eucon.

Bill Collis, chief executive officer, The Foundry said: “Knowing the direction we plan to take The Foundry, we identified that HgCapital was the ideal partner to build on what The Carlyle Group have helped us achieve,

“Nic and his team have such deep software experience, take a long term view on investing and have an amazing track record in taking already solid companies to even greater levels of success. HgCapital achieve this through investment, both in R&D and people, with a deep respect for customer loyalty and satisfaction.”

“With this deal, we remain one of the few independent companies solely focused on creative industries. This lets us pursue our best-in-class strategy, prioritizing research and innovation; and teaming with other companies to create powerful collective solutions.”

“There are so many elements about The Foundry that we find attractive, not the least of which is the core management team,” said Nic Humphries, managing partner of HgCapital and the head of the TMT team. “This is a company that constantly innovates, both in terms of their technology, as well as their business. Bill and his team love nothing more than running head on into the challenges facing creative industries, developing exciting disruptive technologies that have huge potential.”

This was posted in Bdaily's Members' News section by Ellen Forster .