NorthEdge moves into healthcare with eight figure investment
NORTHEDGE Capital has backed the management buyout of a healthcare manufacturer for an undisclosed eight figure sum.
Direct Healthcare Services (DHS), based in Caerphilly, makes pressure area care products, working with tissue viability nurses to design and manufacture mattresses, cushions and overlays used in patient care. As well as selling to NHS Trusts the company exports to more than 20 countries.
Founded in 2009, it employs 80 staff and in 2015 expanded its manufacturing facility by 40% to 45,000 sq ft and invested in new machinery to meet growing demand for its products.
Earlier this year, DHS received the Queen’s Enterprise Award for Innovation for its Dyna-Form mattress, which is designed to reduce the incidence of pressure ulcers in hospital patients.
The firm has a considerable portfolio of intellectual property and will use NorthEdge’s investment to further invest in IP, expand the team, pursue a buy and build strategy and accelerate growth into international markets.
The buyout was led by DHS chief executive Graham Ewart, European sales director Stuart McAllister, operations director Gerry Boyle and Asia Pacific sales director Dermot Patterson. Jon Lewis will stay on as R&D director. Under their leadership, sales have grown by more than 50% over the past two years to £10.6m.
Graham Ewart, chief executive at DHS, said: “This funding allows us to accelerate our growth aspirations and continue to invest in what matters most to our customers – delivering genuine innovation. With a top class management team now in place and the support of NorthEdge we are truly excited about what we can achieve together.”
NorthEdge has acquired a majority stake in the company and the investment team was led by Ray Stenton, partner and head of new business, Jon Pickering, director, and George Potts, investment manager. Michael Joseph, chairman of NorthEdge, will join the board and George Potts will join as an observer.
Jon Pickering, director at NorthEdge Capital, said: “The team has a robust plan in place and I am confident that with our M&A expertise and ability to offer follow-on funding, their market-leading platform will continue to develop even further.”
NorthEdge was introduced to the deal by BBCH Capital and received corporate finance advice from Clearwater International (Mike Reeves, John Clarke, Ramesh Jassal and James Kennedy). Legal advice was provided by Addleshaw Goddard (Paul Medlicott, Oliver Hincks, Ed Hamilton and Helena Drury).
Other advisers on the deal included: Giles Johnson and James Silk of CIL; Chris Heatlie and Thomas Smith at BDO; Peter Sussex and Jim Dowell at The Manufacturing Institute; Andrew Caulton and Steve Heath of KPMG; Alex Clarkson at Diagnostic Capital, Kim Fitzpatrick at Marsh and Mike Rugg-Gunn of Blackwood.
