HgCapital acquires Finland’s leading social care operator, Mainio Vire

HgCapital Trust plc will participate in the acquisition of a majority stake in Mainio Vire alongside other institutional clients of HgCapital. 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. It will contribute approximately £12.5 million to the investment. Based on the 31 May 2011 NAV and the impact of this transaction, liquid resources are estimated to be £89.6 million (25% of the 31 May 2011 NAV) and the Trust’s undrawn commitment to Hg6, Hg5, RPP and RPP2 is £193 million.

Set out below is the text of a press release issued today by HgCapital announcing the acquisition.

HGCAPITAL ACQUIRES FINLAND’S LEADING SOCIAL CARE OPERATOR, MAINIO VIRE

HgCapital, the European sector-focused private equity investor, has today announced the acquisition of Mainio Vire, Finland’s leading social care company, from MB Funds, a Finnish private equity fund.

The acquisition represents a continuation of HgCapital’s thematic, sector-driven investment strategy, with Mainio Vire being HgCapital’s 6^th investment in the health and social care services market. HgCapital’s other current investments in the sector are Voyage in the UK, Frösunda in Sweden and Casa Reha in Germany. The Nordic healthcare market has multiple attractions which underpin this transaction: favourable macro demographics, a solid public funding environment, a highly fragmented market and a strong trend towards private provision of care. HgCapital’s experience with Frösunda has been very positive and highlights the value creation opportunity present in the Nordic health care market.

Founded in 1997, Mainio Vire was one of the first private social care companies in Finland and it has grown rapidly via a combination of opening new care homes and selected small acquisitions to become the market leader in Finland. Today, Mainio Vire is the largest social care company in Finland with forecast sales of €62 million in 2011 (up 21% year on year) and, from 2008 to 2010, it grew sales at 14% CAGR.

Mainio Vire provides services in four business areas: elderly care, mental health, child day-care and home services. HGT operates 54 care homes with 1,675 beds and seven child day-care centres with 360 places. Mainio Vire has one of the widest geographic footprints in the sector and is strongest in the regional economic centres located in the southern and central parts of Finland. Approximately 1,150 people work at HGT and over 800 of these people have formal social or healthcare education.

Commenting on the investment, Carl Harring and Justin Leong, Directors at HgCapital, said: “Mainio Vire is a very attractive business in a fragmented, high growth market. HGT, with its strong management team, class leading systems and quality control processes, offers us an excellent platform for growth. We have identified multiple opportunities to create value through organic growth in its current and adjacent sub-sectors and through potential bolt-on acquisitions.”

Kristiina Hautakangas, CEO of Mainio Vire, said: “We are delighted about our new owners and their in-depth knowledge of the social care sector. The Finnish market is going through a transition period that offers many exciting opportunities to Mainio Vire and we look forward to going through our next phase of growth together with HgCapital.”

The acquisition is anticipated to complete within four weeks. HgCapital was advised in this transaction by SEB in Finland.