HgT announces an investment in Ncontracts

Hg, the Manager of HgCapital Trust plc ("HgT"), today announces an investment in Ncontracts.

Ncontracts, a leading provider of integrated compliance, risk, and vendor management solutions to the financial services industry, also announced today that it has acquired Venminder, a unified platform for managing third-party risk.

Hg has bought out prior Ncontracts shareholder Gryphon Investors, as well as prior Venminder shareholders. The terms of the transaction are not disclosed.

HgT will invest approximately £30.7 million in Ncontracts, with other institutional clients of Hg investing alongside HgT through the Hg Genesis 10 Fund.

HgT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

Note that these figures only relate to HgT's share of Hg's overall investment in Ncontracts.

HgT's liquid resources available for future deployment (including all announced transactions, and the undrawn balance on the bank facility) are estimated to be £466 million (19% of the estimated 30 June 2024 NAV of £2.4 billion).

The investment will reduce HgT's outstanding commitments to invest in Hg transactions to approximately £683 million (28% of the estimated 30 June 2024 NAV).

Ncontracts acquires Venminder via Hg buyout

-       Ncontracts announces the acquisition of Venminder to broaden its governance, risk and compliance solutions capabilities.

-       Hg, a leading investor in software and services businesses, has become a new investor in the combined business, backing Founder and CEO, Michael Berman.

-       Gryphon Investors, a leading middle-market private equity firm, has completed a full exit of Ncontracts.

BRENTWOOD, Tenn., September 4, 2024 -- Ncontracts, a leading provider of integrated compliance, risk, and vendor management solutions to the financial services industry, announced today that it has acquired Venminder, a unified platform for managing third-party risk.

Simultaneously with this transaction, Hg has bought out prior Ncontracts shareholder Gryphon Investors ("Gryphon"), as well as prior Venminder shareholders. Hg is a leading investor in software and services businesses and is backing Founder and CEO, Michael Berman, to lead the combined business, which promises to deliver more value to customers via these expanded capabilities.

Acquiring Venminder gives Ncontracts more depth and expertise in third-party risk management, further enhancing its position as a software-as-a-service (SaaS) and knowledge-as-a-service (KaaS) leader in enterprise risk management.  The investment from Hg brings resources and expertise, continuing to strengthen Ncontracts as a leader in governance, risk and compliance ("GRC") software solutions for banks, credit unions, mortgage companies, fintechs and registered investment advisors, as they grapple with increased risks and regulatory scrutiny.

"We are excited to join forces with Venminder," said Michael Berman, Ncontracts Founder and CEO. "With our teams coming together to help reduce risk, improve compliance and control costs, we will continue to strengthen the financial industry and the communities they serve. With the investment and support from Hg, we are well positioned to continue our rapid growth. Gryphon has been a valuable partner, and I want to thank their outstanding team of operating partners, operating advisors and investment professionals."

"Uniting Venminder and Ncontracts will bring tremendous value to our customers," stated James Hyde, Venminder's CEO. "This strategic partnership extends beyond third-party risk management, propelling Venminder into the broader integrated risk and compliance space. By combining our strengths, we are poised to deliver even more comprehensive and innovative solutions to our clients and the broader market.  Our unwavering commitment is to continue to support our clients by guiding them through the complex landscape of third-party risk."

Ncontracts has been named in the prestigious Inc. 5000 list of fastest growing private companies in America for the sixth consecutive year in 2024. This transaction will grow Ncontracts' customer base further to over 5,000 customers. The investment and acquisition demonstrate Ncontracts' commitment to continued growth from both an organic and inorganic perspective.

Alan Cline, Head of North America at Hg, said: "We see Ncontracts swiftly becoming a 'gold standard' provider of highly automated, AI-enabled, integrated software solutions for the financial industry. The merger with Venminder creates a compelling platform with a comprehensive product suite that can deliver significant value to customers."

Alexander Johnson, a Director at Hg added: "We're excited to partner with Michael Berman as he continues to lead and scale the company for its next stage of growth."

Jon Cheek, Partner & Co-Head of the Software Group at Gryphon, said: "We are delighted to have completed a complex transaction that significantly transforms Ncontracts and positions it to continue to thrive. Through a combination of organic and inorganic growth strategies, Ncontracts has more than quadrupled in size since Gryphon originally invested in 2020. With its comprehensive suite of products meeting the continued demand for sophisticated financial services governance, risk and compliance management tools, the company is poised to continue that aggressive growth going forward."

Gryphon sees continued attractive opportunity for new platform investments in the GRC sector and retains its investment in separate portfolio company RegEd, a leading provider of enterprise regulatory compliance solutions to insurance companies and financial services firms.

Terms of the acquisition were not disclosed.

Raymond James served as the lead financial advisor to Gryphon, with Atlas Technology Group also advising Gryphon; Kirkland & Ellis acted as Gryphon's legal advisor. William Blair served as exclusive financial advisor to Venminder.  Choate Hall & Stewart, LLP served as legal counsel to Venminder.  Goldman Sachs served as financial advisor to Hg; Latham & Watkins served as Hg's legal advisor.

For further details:

Hg

Tom Eckersley                                                                                     +44 (0)208 148 5401

HgCapital Trust

George Crowe                                                                                       +44 (0)20 8396 0930

Brunswick

Azadeh Varzi                                                                                         +44 (0)207 404 5959

[email protected]

About HgCapital Trust plc

HgCapital Trust plc, whose shares are listed on the London Stock Exchange (ticker: HGT.L), gives investors exposure through a liquid vehicle to a portfolio of high-growth private companies in the software and services sector. The selection of new investments and creation of value in these businesses are managed by Hg, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors. For further details, please see www.hgcapitaltrust.com.

The contents of the Hg, HgCapital Trust, Ncontracts, Venminder and Gryphon's websites are not incorporated into, and do not form part of, this announcement.