HgCapital reaps 2.2x on Relay sale to Applied Systems

Financial details of the deal are undisclosed, although unquote" understands the transaction values the business at more than £55m. It is also understood the GP made a 2.2x return on its investment, equivalent to an IRR of around 40%.

The deal marks the first full exit for HgCapital's lower mid-market telecommunication media and technology vehicle Mercury Fund, which held its final close in early 2013 on £380m.

Since HgCapital's investment, the company has expanded its service offering into the commercial insurance and wealth management sectors.

Previous funding
HgCapital provided Relay with £2.2m of growth capital in February 2014, with funding drawn from HgCapital Mercury Fund.

Company
Established in 1985, Relay Software develops intermediary software for insurance brokers, underwriters and insurers. Based in Belfast, the company has an additional office in Dublin with a total of 92 employees, up from 71 at the time of HgCapital's initial investment.

Since 2014 the business has grown its revenues by 14% year-on-year. According to financial reports filed with Companies House, Relay generated pre-tax profits of £1.99m and a turnover of £5.54m in the year ending on 31 January 2015, up from £1.36m and £5.11m in the previous year.

People
HgCapital – David Issott (director).
Relay – Alastair Bell (managing director).
Applied Systems – Reid French (CEO).

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• Topics
• Exits
• UK / Ireland
• Technology
• HgCapital
• United Kingdom
• Trade sale