Middle-market private equity firm HGGC is selling its minority stake in a wildly successful company that more than doubled its revenue to $150 million in two years. HGGC invested in the Davies Group in January 2017. Now that the UK-based Davies Group, which provides both digital and non-digital solutions for insurance, utilities, financial services and communications markets, has doubled its revenue over that time, investor HGGC is selling a minority stake to Alberta Investment Management Corporation (AIMco).
HGGC is selling this minority stake at a time when Davies has more than 400 clients, delivering everything from customer support via online portals to supply chain fulfilment solutions for both property and automobiles. Since HGGC first invested, Davies has integrated or purchased 11 different businesses, and added more than 100 new customers and accounts in 2018 alone.
“HGGC has exceeded our expectations for an investment partner,” said Dan Saulter, CEO of the Davies Group. “The team’s strategic guidance and support has been invaluable. Over the past two years, we have tripled our annual investment in technology and digital transformation, continued to invest heavily in our people, and have significantly diversified our services and solutions for our more than 400 insurance, highly regulated and global clients.
The new investor, AIMco, is a Canadian fund management firm with a reputation for being one of Canada’s most diversified — and largest — institutional investors. AIMco manages more than $100 billion in assets, and guides the investments of more than 30 government, pension and endowment funds in Alberta. Like middle-market investor HGGC, AIMco is truly global, with assets in Europe, South America, the United States and beyond.
Palo Alto-based HGGC’s investment in Davies is emblematic of the middle-market investment firm’s philosophy of backing technology companies that solve complex problems. Rather than simply invest in technology on its own, HGGC’s team seeks out companies that provide essential, technology-enhanced solutions to a variety of industries including supply chain, grocery delivery, auto sales, and more.
Rather than invest in large corporations or small mom-and-pop shops, HGGC takes a strong middle market focus, delivering resources to companies that have leading and competitive positions in defensible markets. The private equity firm is not opposed to making waves through its investments, and recently combined the forces of two ecommerce sellers in the grocery field to take on what many are calling “the Amazon effect”.
HGGC’s approach to Davies has been extremely collaborative. The company added more resources — including technology — and delivered the capital Davies needed to acquire and expand by purchasing other businesses and adding new technology tools.
“From the start, our investment in Davies has been emblematic of HGGC’s philosophy of acquiring compelling platforms and providing them with the resources and value-added expertise to drive growth,” said John Block, Principal at HGGC. “We’re extremely proud to have partnered with Davies Group CEO Dan Saulter and his team to guide the Company’s impressive trajectory and we look forward to partnering with AIMCo to sustain and elevate this success.”
For more information about HGGC, please visit https://www.hggc.com.