Hg, the
Manager of HgCapital Trust plc ("HgT"), today announces an
investment in Empyrean Solutions, a leading provider of risk and
performance management software for financial
institutions.
HgT will
invest approximately £11.7 million in Empyrean Solutions, with
other institutional clients of Hg investing alongside HgT through
the Hg Mercury 4 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 Empyrean Solutions.
HgT's liquid
resources available for future deployment (including all announced
transactions and the interim dividend paid in October 2024, and the
£347 million undrawn balance on the bank facility) are estimated to
be £418 million (17% of the pro-forma 30 September 2024 NAV of £2.4
billion).
The investment
will reduce HgT's outstanding commitments to invest in Hg
transactions to approximately £681 million (28% of the pro-forma 30
September 2024 NAV).
Empyrean Solutions Secures Significant
Investment from Hg
Transaction follows a period of rapid growth
and scaling, where Empyrean has emerged as a leading provider of
integrated risk and performance management solutions for financial
institutions.
Funding will enable Empyrean to accelerate
its product roadmap investments to address more 'Office of the CFO'
software solutions, designed specifically for financial
institutions, as well as expand sales and marketing to keep up with
growing demand.
Woburn, MA. November 21,
2024 - Empyrean Solutions ("Empyrean"), a leading provider
of risk and performance management software for financial
institutions, today announced a significant strategic investment
from Hg, a leading investor in European and North American software
businesses. The Empyrean management team and current investors,
TechVenture Investors and Spectrum Equity, will all remain
shareholders. Spectrum Equity will also participate alongside Hg in
the new transaction.
Empyrean's platform solves mission critical
challenges for finance teams at financial institutions, who
historically have had to navigate large quantities of siloed data,
antiquated software applications and slow, static modelling. With a
modern, cloud-based platform where banks and credit unions of all
sizes can connect and process massive data sets - spanning loans,
treasury & funding positions, deposits and general ledger
information all at a transaction level - Empyrean is transforming
the 'Office of the CFO' for financial
institutions.
While Empyrean started as a specialist in Asset
& Liability Management (ALM), the platform today spans
Budgeting and Planning, Profitability, Data & Analytics and
many other key functions for the finance teams of financial
institutions. With superior technology, deep domain expertise and a
relentless focus on driving innovation, Empyrean is helping the CFO
and their teams to navigate complex economic and regulatory
environments, optimize their financial performance and make
informed strategic decisions.
This transaction follows a period of sustained
and rapid growth at Empyrean. During this time, the Company has
achieved several financial and operational
milestones:
·
Consistent
Growth. Empyrean has grown revenue at 40% per
year since 2017 through a combination of new customer adds and
existing customers adopting additional software
modules.
·
Compelling Customer
Base. 270 total software customers -- spanning
small, mid-sized and large financial institutions -- as of end of
October 2024, including 70 new customers added over the last 12
months alone.
·
Multi-Module
Capabilities. 110 customers have adopted
Empyrean's newly launched Budgeting and Planning module in the
first year since launch.
·
Industry
Recognition. ALM RiskTech Quadrant Category
Leader and Category Winner for Financial Planning & Budgeting
award by Chartis Research as part of its 2024 Chartis RiskTech 100
Awards.
·
Large Bank
Momentum. Recent addition of Ed Young, industry
expert and former Fed risk specialist, who joins as Managing
Director with a mandate to expand Empyrean's growing base of banks
with $100bn+ in total assets.
"Our strategy - replacing legacy software
solutions and disparate datasets with a single, SaaS native and
cloud-based platform - is gaining traction in the sector." said
Chris Maclin, Chief Executive
Officer of Empyrean. "This new investment and our
partnership with Hg will enable Empyrean to better address the
needs of financial institution CFOs, and drive innovation in a
space where it is desperately needed. We're thrilled to welcome Hg
as a new investor as we embark on the next phase of Empyrean's
journey."
"Hg's knowledge of software businesses and their
proven track record partnering with companies across growth
initiatives will be invaluable as we continue to innovate and
expand our reach," said Raffi
Festekjian, Managing Director at TechVenture Investors. "We
are also pleased that Spectrum Equity will remain actively involved
as we work together to realize our shared vision of delivering to
the financial services industry a comprehensive 'Office of the CFO'
platform that is a single source of the truth, further solidifying
our strong position in the
industry."
"The Empyrean success story is still in its
early innings," said Farouk
Hussein, Partner at Hg. "Our knowledge of the 'Office of
CFO', experience in banking software, and extensive work across
this sector confirmed Empyrean's unique positioning. We are
impressed by Empyrean's management team and their approach to
launching new products that solve financial institution CFO
customer pain points, and we look forward to backing Chris and
partnering with the existing shareholders and management
team."
"This is exactly the right time for Empyrean to
bring on a like-minded growth investor like Hg to help Empyrean
realize the company's full potential. The next chapter of growth at
Empyrean will see the company stay true to its core mission but
also pursue new growth initiatives like international expansion and
penetration of the largest US and global financial institutions"
added Adam Margolin, Managing
Director at Spectrum Equity.
Piper Sandler is serving as exclusive financial
advisor and Choate, Hall & Stewart LLP as legal advisor to
Empyrean. Raymond James is serving as exclusive financial advisor
and Kirkland & Ellis LLP as legal advisor to
Hg.
The terms of the transaction have not been disclosed
and is subject to closing.
For further
details:
Hg
Tom Eckersley
+44 (0)208 148 5401
HgCapital Trust
Laura Dixon and George Crowe
+44 (0)20 8396 0930
Cadarn
Lucy Clark
+44 (0)7984 184
461
Cadarn
David Harris
+44 (0)7368 883211
Brunswick
Sofie
Brewis
+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, Empyrean, TechVenture Investors and
Spectrum Equity's websites are not incorporated into, and do not
form part of, this
announcement.