HgCapital makes powerful exit

HgCapital has made a substantial gain on its 1998 investment in pipeline integrity services company, PII Group. The firm has sold its 70 per cent stake in PII to GE Power Systems, a leading supplier of power generation technology, energy services and management systems for an undisclosed amount. HgCapital is reported to have enjoyed a return of four times its original investment.

“PII has successfully grown over the past four years to be a leading global pipeline integrity company and has been an excellent investment for us,” said Frances Jacob, director, HgCapital.

HgCapital acquired PII from British Gas in 1998 for GBP116 million and successfully integrated the current senior management team into the company. PII subsequently expanded its position in the pipeline integrity services business by making a number of strategic acquisitions.

In November 1999 Candover co-invested with HgCapital to enable PII to acquire German-based Pipetronix, its largest competitor in a GBP232 million transaction. Senior debt was provided by Deutsche Bank. The merger enabled the group to offer its customers a more comprehensive range of products and services. PII now has turnover of over GBP115 million and operates in over 45 countries worldwide.

This is the third realisation from the Candover 1997 Fund. Charlie Green, director of Candover, said: “PII has been a very successful investment for Candover, returning in excess of two times our original investment. PII’s management has created the clear global market leader in pipeline inspection through the successful integration of Pipetronix. GE Power Systems is an excellent new parent for PII and should present the company with further opportunities for growth.”

Tony Powell, CEO, PII added: “GE Power Systems is the perfect new parent for PII and we are looking forward to the next stage of our company’s development under GE’s ownership.