On Thursday, Hg, the manager of HgCapital Trust plc (LSE:HGT.L), announced a strategic investment in Empyrean Solutions, a prominent provider of risk and performance management software tailored for financial institutions. The investment by HgCapital Trust (HgT) is approximately £11.7 million, with additional funds coming from other institutional clients of Hg through the Hg Mercury 4 Fund.
This transaction is part of Hg's strategy to invest in high-growth private companies within the software and services sector. Following this investment, HgT's liquid resources for future investments are estimated at £418 million, which is 17% of the pro-forma net asset value (NAV) as of September 30, 2024. The investment will also reduce HgT's outstanding commitments to invest in Hg transactions to about £681 million.
Empyrean Solutions, headquartered in Woburn, MA, is recognized for its integrated solutions that address critical challenges faced by finance teams at financial institutions. Empyrean's cloud-based platform enables the processing of extensive data sets, which is a transformative step for the 'Office of the CFO' in such institutions. The company has seen substantial growth, with a 40% annual revenue increase since 2017, and has a strong customer base of 270 financial institutions as of the end of October 2024.
The funding from Hg will enable Empyrean to accelerate its product roadmap investments, focusing on more 'Office of the CFO' software solutions, and expand its sales and marketing efforts to meet the growing demand. The investment follows Empyrean's recent achievements, which include the launch of a new Budgeting and Planning module adopted by 110 customers within its first year and recognition as a leader in ALM RiskTech and Financial Planning & Budgeting by Chartis Research.
Chris Maclin, CEO of Empyrean, expressed enthusiasm about the partnership with Hg, stating that it will enhance the company's ability to meet the needs of CFOs in financial institutions and drive innovation. Spectrum Equity, a current investor in Empyrean, will also participate in the new transaction alongside Hg.
The terms of the transaction have not been disclosed, and the deal is subject to closing conditions. Piper Sandler is acting as the exclusive financial advisor to Empyrean, with Choate, Hall & Stewart LLP serving as legal advisor. Raymond (NS:RYMD) James and Kirkland & Ellis LLP are advising Hg.
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