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HgCapital inks first investment from Mercury fund with Valueworks deal

8 Oct 2012

European private equity house HgCapital has completed a majority investment in UK online marketplace Valueworks.

The transaction marks the first investment from the firm’s HgCapital Mercury fund, a fund raised in the last year specifically to target lower mid-market buyouts in TMT sub-sectors.

Founded in 2000, Valueworks provides e-marketplaces platform to landlords, contractors and merchants in the UK social housing and construction market. Valueworks’ founding shareholders will reinvest a considerable portion of their stake in the business as part of the transaction.

HgCapital will support the existing management team with a focus on growing the business as a procurement hub in housing and related construction sectors, according to Matthew Brockman, who leads HgCapital’s Mercury team.

He said, “We are delighted to make our first investment from the new Mercury fund. The Mercury fund was recently established to extend HgCapital’s TMT investment focus on software and technology enabled services into smaller European buyouts. As a leading electronic network similar to several other businesses that we have backed, Valueworks is a great example of the companies that we seek to support with the fund.”

Valueworks has a similar business model to HgCapital’s existing electronic network TMT investments, Epyx (HgCapital 6 fund) and Achilles (HgCapital 5 fund), Brockman said.

David Issott, who co-led the deal for HgCapital’s Mercury team, added, “We are excited to support the founding management team of Valueworks as they continue to build a leading procurement network within the UK construction sector. Valueworks provides an essential service to housing landlords and suppliers and we look forward to contributing our specialist knowledge of these business models to further develop its products and services.”

Last week AltAssets reported that HgCapital had put Smurf-maker Schleich up for sale, six years after it bought the German company.

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