Hg reinvests in Citation

Katharine Hidalgo
23 September 2020

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Hg has reinvested in compliance software company Citation.

Following Hg's sale of Citation to KKR in August 2020, Hg has now exercised its option to reinvest. The firms each have a co-controlling stake in the company.

Hg is currently investing from Hg Mercury 3, which held a first close on €1bn in March 2020; Hg Genesis 9, which held a first close on €3bn in March 2020; and Hg Saturn 2, which held an interim close on $4bn in March 2020.

Previous funding
ECI Partners acquired a majority stake in Citation in December 2012 in a management buy-in that valued the company at £50m. According to Unquote Data, ECI invested via its ninth fund.

In 2016, ECI sold Citation to Hg (at the time known as HgCapital), generating a 5x money multiple. Hg acquired a majority stake in the company alongside the existing management team.

Hg sold the company to KKR in August 2020. KKR drew equity from its KKR European Fund V, which closed on €5.8bn. It was also investing from its Global Impact Fund, which closed on $1.3bn. The transaction was valued at £500-600m.

Company
Citation helps SMEs comply with regulations and quality standards in areas such as health and safety, and HR and employment law. It does this through a combination of expert advice, software tools, and audits and assessments, mostly on a long-term subscription basis. Founded in 1995, the company is based in Cheshire and generated £40m in revenue in 2018.

People
KKR – Tim Franks (partner); Joerg Metzner, Stanislas de Joussineau (directors).
Hg – Nick Jordan, Joris Van Gool (partners).
Citation – Chris Morris (group CEO).