04:47 Fri 15 Jan 2010
HgCapital finalises £80 million stake in Goldshield MBO
Private equity trust HgCapital has completed its participation in the £179 million management buyout of UK pharmaceutical company Goldshield.
The stake comes in the form of a recommended cash offer and gives HgCapital Trust (Ordinary Share) a total stake of £11.3 million, while its parent company HgCapital and its clients hold a stake worth £80.8 million.
After completing the deal, HgCapital still had a net cash position of £85.7 million.
Roger Mountford, chairman of HgCapital Trust, said the acquisition was a sign that private equity investments could be completed in today's market and that investors with cash to invest in a recession could now acquire quality businesses relatively cheaply.
'While we should not expect a smooth recovery from recession, we believe that 2010/11 will offer a growing pipeline of opportunities to build a portfolio of high quality businesses at realistic prices,' he said.
Ian Armitage (pictured), chairman of parent group HgCapital, the private equity firm which buys company stakes in which the Hg Capital Trust invests, said the company had sold 30 businesses in 2007 and 2008 to improve liquidity ahead of the global downturn.
'Being judicious investors in 2007 and 2008, we are well-placed to take up good acquisition opportunities, both for HgCapital Trust and our other institutional clients.'
He added: 'As 2010 opens we have the strongest pipeline of potential new investments for some time. However, we continue to believe that difficult trading conditions will persist and so we will carefully balance the opportunity to acquire businesses against the need to have clear line of sight on their trading prospects.'
'We expect the rate at which we will deploy the funds to accelerate progressively over the next 36 months.'
Hg Trust was trading at its narrowest discount for over a year on 14 January, at -2.5%.
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