Three Hills invests £40m in telematics specialist Trak

The deal is a hybrid minority investment composed of both loan notes and equity. 

Unquote understands that the GP deployed capital from its Three Hills Capital Solutions III fund, which held a final close in February 2019 on €540m, exceeding its €400m target. The vehicle invests in European mid-market businesses, providing equity for minority stakes, as well as debt securities, and supporting companies that want to invest in growth but avoid dilution of ownership and control.

As part of the deal, Joe Jefferies, UK principal at Three Hills, will join TGG's board.

The company intends to use the fresh financing to accelerate the development of its new cloud-based platform, DriveSync 6; increase its customer base across the insurance, mobility, automotive and government sectors; and boost its expansion, primarily in the North American market. 

In addition, the group will pursue a buy-and-build strategy via additional acquisitions in the coming months with the aim of creating a platform specialising in data-driven technology for the insurance and mobility markets.

Company
Established in 2009, Trak Global Group is a telematics specialist that provides insurers, motor manufacturers, corporate fleets and daily rental companies with data from connected devices to help manage driver and vehicle risk. Its customer base includes RSA, Volkswagen Financial Services, Nationwide Insurance, Allianz, Europcar and Zipcar.

The company is headquartered in Crewe, Cheshire, and has offices in Manchester in the UK, as well as Ontario, Canada, employing 250 staff. It also owns and operates a UK-based subsidiary, telematics insurance broker Carrot Insurance. 

TGG generated EBITDA of £7m from revenues of £20m in 2018 and expects to exceed turnover of $50m in 2019, following its acquisition of Canada-based insurance telematics specialist Intelligent Mechatronic Systems, inked in December 2018.

People 
Three Hills Capital Partners – Joe Jefferies (UK principal).
Trak Global Group – Nick Corrie (co-founder, CEO).

Advisers
Company – PwC (corporate finance, financial & commercial due diligence, tax); DWF (legal).
Equity – KPMG (corporate finance, financial & commercial due diligence); EY (tax); CMS (legal).

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