HIG backs Engine Groups’ forays overseas

http://www.ft.com/cms/s/0/aa43c68c-d6ed-11df-aaab-00144feabdc0.html?ftcamp=rss

Engine Group, the London-based marketing services company, is raising up to £62.5m from a private equity firm to fund expansion into the US, Brazil and China.

The initial investment of £32.5m by HIG Capital is a relatively rare foray by private equity into the advertising agency world. A further £30m will be available over the next two years as Engine expands, with HIG eventually holding a stake below 40 per cent.

The group, which owns ad agency WCRS and PR group MHP, said last month that it was postponing a planned initial public offering this year, due to the unwelcoming financial markets.

HIG’s investment, from its mid-market European fund, will also allow existing shareholders – including 200 Engine employees and management – to cash in up to 30 per cent of their stake.

Engine’s like-for-like revenues grew by 8.2 per cent to £34.3m in the first half of 2010, after the group swung into profit last year.