REG - HgCapital Trust PLC - Hg acquires AuditBoard

HgCapital TrustAnnouncement

23/05/2024 17:30

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RNS Number : 7297P  HgCapital Trust PLC  23 May 2024

Hg, the Manager of HgCapital Trust plc ("HgT"), today announces an investment
in AuditBoard, a leading connected risk platform transforming audit, risk,
compliance and ESG management.

 

The terms of the transaction are not disclosed.

 

HgT will invest approximately £87.2 million in AuditBoard, with other
institutional clients of Hg investing alongside HgT through the Hg Saturn 3
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 AuditBoard.

 

HgT's liquid resources available for future deployment (including all
announced transactions, the undrawn bank facility and the full year dividend
paid in May 2024) are estimated to be £570 million (24% of the 31 March 2024
NAV of £2.3 billion).

 

The investment will reduce HgT's outstanding commitments to invest in Hg
transactions to approximately £739 million (32% of the 31 March 2024 NAV).

AuditBoard agrees to be acquired by Hg

for over $3 billion

 

Hg, a leading investor in European and transatlantic software and services
businesses, will help fuel further growth at AuditBoard, as the company
continues to expand its platform and global reach.

Los Angeles, CA. May 23, 2024. - AuditBoard, a leading connected risk platform
transforming audit, risk, compliance and ESG management, today announces that
it has reached an agreement to be acquired in a transaction valued at over $3
billion, by Hg, an experienced and global leading investor in compliance, risk
and accounting software over the last 20 years.

 

The deal validates AuditBoard's customer centric approach and potent
combination of innovative technology - like the recently announced AuditBoard
AI (https://www.auditboard.com/platform/ai/) - and domain expertise at a time
when demand for its connected risk platform and related solutions is fueling
rapid global growth.

The company now serves more than 2,000 enterprises, including nearly 50% of
the Fortune 500. Founded in 2014, AuditBoard announced earlier this year it
had crossed a milestone of $200 million in annual recurring revenue during
late 2023. Its last funding round took place in 2018 - a Series B led by
Battery Ventures, the firm's largest institutional shareholder.

 

"We are grateful to our customers and their teams for the trust they have
placed in us, and view our partnership with Hg as further validation of our
practitioner-first focus," said Scott Arnold, AuditBoard CEO.

 

He added: "The foundation and culture that our founders created has
meaningfully scaled to create an opportunity for AuditBoard to become the
platform of choice for global organizations to connect and manage risk. This
is an important milestone for the company, and we couldn't have done it
without the unwavering support of our employees, partners, and incredible
investors - especially Battery Ventures. We look forward to continuing to
build and expand the platform of the future with Hg."

 

"AuditBoard's astonishing growth is a result of its commitment to its
SaaS-native beginnings, focus on customer success and a differentiated, truly
modern tech stack," said Nic Humphries, Senior Partner and Head of the Saturn
funds at Hg. "We have been tracking the company's progress for the past five
years and see a massive opportunity ahead. We are excited to partner with
Scott and the AuditBoard team, to support the company on its next phase of
rapid global growth and platform expansion."

 

"We are absolutely delighted to invest in such an incredible SaaS success
story, led by our San Francisco team less than two years after opening our
West Coast office, demonstrating the strength of our North American
franchise," said Alan Cline, Head of North America at Hg. "AuditBoard is
exactly the type of business we partner best with - one that truly knows its
customers and innovates to bring them the best possible products. We can't
wait to get started."

 

Hg has a long and successful history of investing in enterprise software
companies over the last 20 years. Hg will use its experience to support
AuditBoard's differentiated offerings as it continues to scale, focusing on
product innovation, international growth, and customer success.

 

"AuditBoard is a special company - customer-first, product-led, and one that
has bucked recent industry trends by running in an extremely capital-efficient
manner, instead of continually raising more funding," said Michael Brown, a
Battery Ventures general partner and AuditBoard board member. "While other B2B
tech companies raised ever-bigger funding rounds, AuditBoard has kept its head
down and focused on the fundamentals, no matter the market cycle. Our
partnership with the AuditBoard team since our first investment in 2018 has
been collaborative and enriching, and I look forward to seeing the company
continue to grow and mature in partnership with Hg."

 

"When we founded AuditBoard back in 2014, our goal was to use software to
solve the serious challenges that exist for an auditor," said Daniel Kim,
AuditBoard co-founder. "This acquisition represents a realization of not only
our vision, but validates how taking a customer and practitioner-centric
approach is the right way to develop technology that users will be passionate
about." Jay Lee, AuditBoard co-founder added, "Our sincere congratulations to
Scott, Hg and the AuditBoard team. I can't wait to see what's next."

 

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to
AuditBoard; Cooley LLP is serving as legal counsel to AuditBoard.

 

For further details:

Hg

Tom Eckersley
                                          +44 (0)208 148
5401

 

HgCapital Trust

Laura
Dixon
+44 (0)20 8396 0930

 

Brunswick

Azadeh
Varzi
+44 (0)207 404 5959

Hg@brunswickgroup.com

 

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, Battery Ventures and AuditBoard's
websites are not incorporated into, and do not form part of, this
announcement.

 

 

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