HgCapital intends to sell its investment in Mondo Minerals once it has completed the required employee consultation obligations. Upon the sale, which is anticipated to complete in the next four months, HgCapital Trust plc, the listed investment trust which invests in all HgCapital?s deals alongside its institutional clients, expects to initially realise estimated cash proceeds of £13.7 million and a further amount of up to £2.8 million over the next two years. This compares to a carrying value of £13.5 million in the Net Asset Value (NAV) of the Trust at 31 May 2011 and an original cost of £7 million.
Set out below is the text of a press release issued today by HgCapital. HgCapital announces the intended sale of Mondo Minerals London,  June 2011: HgCapital has today announced the intended sale of Mondo Minerals (“Mondo”), the world’s second largest talc producer, to Advent International Corporation, subject to carrying out the required employee consultation obligations. HgCapital originally invested in Mondo in 2007 and the sale is anticipated to complete in the next four months. Mondo is a leading international producer of high?performance talc with a leading European market position. The Company is the supplier of choice for paper, paints and coatings and plastics applications and also has a growing presence in a range of niche end?markets including ceramics, food and personal care.
The sale of Mondo will represent HgCapital’s fifth realisation over the last twelve months leading to an anticipated return for these five realisations of approximately 3.2x combined gross original cost and an IRR of c. 24%. HgCapital has clearly demonstrated with this transaction and other divestments since the start of the credit crunch in September 2008 that it can generate strong risk?adjusted returns across the economic cycle. During HgCapital’s period of ownership, Mondo has delivered EBITDA growth of approximately 50% and increased employee headcount by 12% despite challenging trading conditions throughout the recession. This performance provides another example of HgCapital’s commitment to investing in platform businesses with the potential for growth and performance improvement.
Since 2007, HgCapital has actively supported Mondo’s management in implementing a number of initiatives including: repositioning the business with a strong focus on highmargin end?markets; broadening its geographic footprint into markets outside Northern Europe; refocusing the commercial offering on direct sales to customers; enhancing the processing capabilities; and optimising the Company’s cost structure. Commenting on the realisation, Joachim Drees, a Partner at HgCapital, stated: “Working closely with the management team HgCapital has helped Mondo achieve strong operational and financial performance over the last three years despite the global recession. The business has delivered significant growth, strong cash conversion rates and has an excellent platform for future growth.”
Nic Humphries, CEO of HgCapital, said: “Mondo is a good example of how HgCapital can make a significant contribution to the development of a niche business with significant global potential. Growth opportunities exist in Asia and in South America and the business already has a clear strategy to maximise these new markets.”
HgCapital is advised in this transaction by Lazard & Co.,Limited, Millington Advisory Partners and Clifford Chance.
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For further details please contact:
HgCapital: Joachim Drees +44 (0)20 7089 7940
Maitland: Neil Bennett +44 (0)20 7379 5151
About HgCapital Trust plc
HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange. The Trust is a client of HgCapital, giving investors exposure to a portfolio of highgrowth private companies, through a liquid vehicle. New investments and existing portfolio companies are managed by HgCapital, an experienced and well resourced private equity firm with a long?term track record of delivering superior risk?adjusted returns for its investors. The Trust has won the Investment Week Private Equity Investment Trust of the Year in 2005, 2006, 2007, 2008, 2009 and 2010. For further details, please see www.hgcapitaltrust.com
HgCapital is a private equity investor focused on the European middle market. Its business model combines sector?specific thematic investing with dedicated portfolio management support. HgCapital seeks to invest in growth companies in expanding sectors which create mjobs across Western Europe HgCapital is also an investor in renewable energy, establishing itself as a market leader by building a dedicated energy investment team in 2004. It continues to invest a dedicated fund in a range of renewable power technologies across Western Europe. HgCapital manages over £3.4 billion for some of the world’s leading institutional and private investors. For further details, please see www.hgcapital.com.
About Mondo Minerals
Mondo is a leading international producer of high?performance talc with a leading European market position. The Company is the supplier of choice for paper, paints and coatings and plastics applications and also has a growing presence in a range of niche end?markets including ceramics, food and personal care. Headquartered in Amsterdam, the Company has c.200 full time employees across its operations in Finland, the Netherlands and its sales teams worldwide. Further information on Mondo is available at www.mondominerals.com Neither the contents of HgCapital’s or Mondo’s website nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.