Advised HgCapital on its reinvestment in Visma, the leading ERP Software and BPO provider in the Nordic region
Apr 2014
invested in
$3,500 million
  • Sector: Application Software
  • Deal Type: Private Equity Deals
  • Engagement type: Buyside
  • Size: $3,500 million

Arma Partners is pleased to announce that it has acted as financial adviser to HgCapital on its reinvestment in Visma Group Holdings (“Visma”), a leading software and BPO services business in the Nordic region, valuing the business at a total enterprise value of NOK 21 billion (£2.1 billion, $3.5 billion). As part of this transaction, KKR are selling part of their majority holding in Visma and Cinven are committing capital for the first time. HgCapital will be a co-lead investor in the new transaction structure, alongside KKR and Cinven, who will each hold 31%.

HgCapital initially invested in Visma in 2006 through its HgCapital 5 Fund. Thereafter, HgCapital sold a majority of its stake to KKR in late 2010, crystallising a substantial capital gain and still retaining a minority 17% shareholding in 2010 and continuing to play an active Board role in the business. The total return on all capital invested by HgCapital between 2006 and 2014 will generate an overall investment multiple of 5.2x and a gross IRR of 34%. HgCapital’s re-investment in Visma through its new HgCapital 7 Fund is expected to generate further attractive returns over an anticipated five to six year new ownership period.

HgCapital will continue to work with Visma’s management in the ongoing transition of the company’s software products to Software as a Service (‘SaaS’). Visma is currently positioned as one of the leading and largest SaaS companies in Europe, with potential to accelerate this growth both through organic investment and further acquisitions.

– Visma is one of Europe’s largest technology companies with revenues of NOK 6.5 billion ($ 1.1 billion), c. 340,000 customers and c. 5,600 employees

– The company provides business software, outsourcing services, commerce solutions, retail IT solutions, and IT related development and consultancy, predominantly to small businesses

– It has c. 100 offices throughout Norway, Sweden, Denmark, Finland, the Netherlands, the United Kingdom, Ireland, and Romania

– HgCapital is a leading European private equity firm with £5.1 billion ($8.7 billion) AuM

– HgCapital was established in 2000 as a spinoff from Mercury Asset Management and today employs more than 100 investment professionals across its offices in the UK and Germany

– The company is currently investing out of its three funds HgCapital 7 (£2 billion), RPP2 (£444 million) and HgCapital Mercury (£400 million)

– HgCapital initially acquired a majority stake in Visma in 2006 via a tender offer and consecutively de-listed the company

– Since 2006, Visma grew organically and with over 75 bolt-on acquisitions from NOK 2.3 billion in 2006 to NOK 6.5 billion in 2013

– Following the sale of a majority stake to Kohlberg Kravis Roberts (“KKR”) in 2010, HgCapital retained a 16% minority stake in the business via its HgCapital 5 fund

– Based on the bright economic outlook for the Nordic region and a promising outlook for the company’s SaaS business, HgCapital decided to re-invest in Visma out of its latest fund HgCapital 7

– Arma Partners was engaged by HgCapital to provide detailed analysis on the business’ transition towards a more SaaS-centric business model and to evaluate potential exit scenarios

– Arma Partners provided in-depth analyses of the varying degrees of success of several transitions from a license/maintenance-based model towards a SaaS-centric business model and the resulting value implications

– This transaction demonstrates Arma Partners’ deep insight and breadth of knowledge in the Software space, particularly with regards to traditional, license/maintenance-based businesses aiming to transition towards a SaaS business model