04 June 2010
The acquisition, subject to regulatory approval, of a majority stake in Manx Telecom by HgCapital on behalf of its clients has been announced today. HgCapital manages the investment portfolio of HgCapital Trust plc alongside those of other institutional clients. The Trust, which is a listed investment trust giving private and institutional investors the opportunity to participate in all HgCapital’s investments, will contribute approximately £11 million which represents 15% of HgCapital’s total investment.
HGCAPITAL ACQUIRES MAJORITY STAKE IN MANX TELECOM
HgCapital, the European sector focused private equity investor, is pleased to announce that it has today acquired a majority stake in Manx Telecom, the Isle of Man’s largest telecommunications and internet provider.
The total enterprise value of the transaction is £158.8 million and the acquisition is being completed alongside CPS Partners, a specialist international telecommunications management company. The acquisition is expected to be completed by the end of June 2010 subject to local regulatory clearance.
Manx Telecom is a wholly owned subsidiary of Telefónica and offers the full range of fixed line, mobile and data services to consumers and businesses. It has a successful track record in achieving major industry breakthroughs – it was the first company in Europe to launch a live 3G service and also launched Europe’s first commercial High Speed Downlink Packet Access (HSDPA) service. Manx Telecom continues to support the Isle of Man Government's e-business strategy of developing a world-class telecommunications infrastructure to attract companies and investment to the island. HGT employs 300 people and reported revenues of £69 million, with EBITDA of £25 million, in the year ended 31 December 2009.
Commenting on the investment, Alex King, Head of TMT at HgCapital, who led the transaction, stated:“While economies across Europe continue to be in a state of flux, the Isle of Man has proved an excellent base for companies, boasting over 25 years of unbroken GDP growth. It has a diversified economy coupled with an educated and skilled workforce. Furthermore, the Isle of Man has invested heavily in electronic services, for which the island has achieved a global reputation.
“Manx Telecom has a superb record of sustainable organic growth. HGT also has an excellent management team to whom we will provide our full backing in taking the business forward. We see this as very much a growth investment for HgCapital and will continue to invest in supporting the organic growth of the business and in the form of bolt on acquisitions. This is another investment consistent with our strategy of backing resilient growth companies.”
Simon Cunningham, Partner at CPS added: “This is the first collaboration between CPS and HgCapital and we are delighted to be involved. Both companies enjoy best in class reputations based on a long track record of investment and operational success, it is a great combination. We look forward to working with Chris Hall, Manx Telecom Managing Director and all his team in continuing the development and success of HGT.”
Chris Hall, Managing Director at Manx Telecom, said, “We are delighted that HgCapital and CPS Partners have chosen to make this significant investment in Manx Telecom, and in the Manx economy. This is a huge endorsement of our track record in building a world class company, and a vote of confidence in the future of the business. We are extremely excited to have the opportunity to work with such professional and dynamic partners, each of whom have the skills and experience required to ensure that we can continue to develop the Isle of Man’s class leading telecoms infrastructure, and help us to maximise the potential of our global off-Island business.”