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Hg looks for Mercury Pharma exit

European mid-market private equity firm HgCapital has mandated investment bank Jefferies Group to sell Mercury Pharma less than three years after it bought the group.

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European mid-market private equity firm HgCapital has mandated investment bank Jefferies Group to sell Mercury Pharma less than three years after it bought the group. 

The Sunday Times reported that the deal could be valued at around £350m (€433.8m), nearly double the £179m Hg paid to delist the company in December 2009.

The investor put around £80m of equity into Mercury, which at the time was known as Goldshield. HSBC, Lloyds and Royal Bank of Scotland advanced a debt package on the take-private. 

Hg hit a stumbling block with Mercury when three months after the deal it discovered evidence of Mercury understating its reported profits while trading as a public company.

Two months later, in May 2010, the private equity firm concluded an internal investigation by deciding not to take action against Mercury's management. 

Later that month, chief executive Rakesh Patel and co-founder Kirti Patel decided to step down from the business, but both stayed on as shareholders. 

Hg hired the former UK managing director of Teva Pharmaceuticals, John Beighton, to take the reins.