HgCapital to reap 2.1x in Manx IPO

Ellie Pullen
05 February 2014

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The IPO of HgCapital's Isle of Man-based telecoms operator Manx Telecom will give the company a market cap of around ТЃ160.2m and generate a 2.1x money multiple for its backer.

HgCapital is selling its entire shareholding in the Manx flotation and is expecting to realise an overall investment multiple of 2.1x its original investment, as well as a gross IRR of 26%.

HgCapital and CPS Partners, with which HgCapital executed the buyout of Manx in 2010, will both fully divest their stakes through the sale of 47.3 million shares, reaping £67.2m between them. Manx will list a further 62.9 million new ordinary shares to raise £89.2m.

Manx will sell its shares at a price of £1.42 apiece on the London Stock Exchange's Alternative Investment Market (AIM). The company's listing on the AIM is expected to take place on Monday 10 February.

Last month, unquote" reported that HgCapital had appointed Liberum Capital and Oakley Capital to prepare the flotation.

HgCapital's exit from Manx will mark the fifth realisation from the firm's HgCapital 6 fund, which held its final close in December 2009 on £1.87bn. The divestment of the firm's Manx stake will mean that the fund has returned 45% of invested capital back to LPs.

Previous investment
The firm acquired Manx in June 2010, buying a majority stake from Telefónica in a deal valued at £158.8m. According to unquote" data, Lloyds TSB provided a debt package for the deal.

Company
Manx is headquartered in the Isle of Man, where it employs 280 staff. In 2012 the group generated turnover of £72.4m, representing a year-on-year increase of 4.7%, and an EBITDA of £24.6m, an increase of 15.2%.

Manx provides fixed-line, mobile, broadband, hosting and managed services to businesses, consumers and the public sector throughout the Isle of Man.

The company was originally founded in 1889.

People
Mike Dee is the CEO of Manx. Nic Humphries is a managing partner and head of TMT at HgCapital, while Edward Wielechowski is an associate director in the firm's TMT team.

Advisers
Equity – Liberum Capital (Corporate finance); Linklaters (Legal).