H.I.G. Capital News


Matthias Allgaier
Managing Director

Thomas Scriven

H.I.G. European Capital Partners, LLP
25 St. George Street
London W1S 1FS
P +44 (0)20 7318 5700

An Affiliate of H.I.G. Europe Acquires Strategic Stake in The Engine Group

Investment Will Drive Global Expansion

LONDON - December 3, 2010 - H.I.G. Europe, the European advisor to H.I.G. Capital, a leading global private equity investment firm, announced today that one of its affiliates has made a significant investment, of up to GBP 62.5 million, in The Engine Group (Engine), the UK’s largest privately owned communications group.

With more than 600 employees, Engine is a UK market leader across a number of marketing, communications and consulting disciplines including advertising, digital strategy, social media marketing, public relations and management consulting. The company recently announced strong H1 2010 results as Engine continued to perform strongly through the recession and out-performed itsquoted peers in growth levels.

The H.I.G. investment will allow Engine to accelerate its plans to expand into a range of markets around the world, including potential acquisitions in the USA, China and Brazil. Engine recently announced its first acquisition in the U.S., and expects to complete a second U.S. transaction shortly. H.I.G.’s investment will also support the strengthening of Engine’s position in the UK market and the further exploration of European opportunities.

As part of the transaction, H.I.G. Europe has made an initial investment of GBP 32.5 million to fund the growth plans of Engine. Engine will also have the ability to draw down an additional GBP 30 million from H.I.G. Europeover the next 12 to 24 months, subject to certain conditions.

Peter Scott, Engine Chairman and Joint Chief Executive, said:
"Over the last six years the success of Engine’s unique marketing services model of ‘best in class under one roof’ has been proven by our strong record of growth and by the broadening of our working relationships with our clients. In an increasingly complex and fragmented media world, Engine’s model brings together a full suite of marketing and communications disciplines to work together more effectively and efficiently for our clients."

"Our clients are global businesses and we now want to take the model that we have built in the UK to other markets. Earlier this year we established Engine USA, which was the first step in exploring international expansion. We will now take the Engine model and re-create it in key markets around the world, with our teams able to work together to deliver the best in integrated global solutions for the biggest worldwide businesses and brands."

"A strong financial partner offers the best route to provide the necessary capital for the next stage in Engine’s expansion. Critical in our consideration of the right financial partner was our confidence that they genuinely understood our model, the marketing sector and that they shared our vision of the opportunity for growth. We have been impressed with the H.I.G. team, their dynamism and approach and welcome them as true partners in Engine."

Matthias Allgaier, Managing Director at H.I.G. Europe, commented:
"Engine has an outstanding management team and enjoys a strong market position in the UK. We are excited to provide the capital to accelerate Engine’s growth both in the UK and internationally. We view this investment as an excellent example of H.I.G. using its global presence and experience to back a complex international business with outstanding prospects."

Thomas Scriven, Director at H.I.G., added:
"Engine is one of the few truly integrated communications firms in Europe and we look forward to scaling its value proposition beyond its home market."

H.I.G. Europe was advised by Tri-Artisan Partners Europe, Kirkland & Ellis and Ernst & Young. Engine was advised by Ingenious Corporate Finance and Macfarlanes.

About Engine
Engine was established in 2005. Today, it employs 600 associates across 12 different communications companies operating in disciplines including digital communications, advertising, direct marketing, public relations and strategy consultancy. www.theenginegroup.com

About H.I.G. Capital
H.I.G. Capital is a leading global private equity investment firm with more than GBP 6 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, New York, and San Francisco in the U.S., as well as affiliate offices in London, Hamburg and Paris in Europe, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. H.I.G. also has extensive experience with financial restructurings and operational turnarounds. Since its founding in 1993, H.I.G. invested in and managed more than 200 companies worldwide. The firm's current portfolio includes more than 50 companies with combined revenues in excess of GBP 5 billion. For more information, please refer to the H.I.G. website at www.higcapital.com