Enterprise Ventures snapped up for £11m

ONE of the region’s leading provider of finance to small businesses has been snapped up in an £11m deal.

Manchester-headquartered Enterprise Ventures has been bought by Mercia Technologies in a deal Mercia said will accelerate its plans to become a national technology investment business.

Enterprise Ventures, which was owned by its senior management team, provides early stage and growth finance in the North of England. It manages a portfolio of almost 150 equity investments from its four offices in Preston, Manchester, Liverpool and Barnsley and employs 32 staff. 

The third party funds it manages include the European Regional Development Fund and the European Investment Bank, and is able to invest up to £2m into businesses.

For the year to March 2017, revenues from Enterprise Ventures are forecast to be £4.5m and post-tax profits are forecast to be £800,000.

The deal is inititally for £9m, made up of £8.3m cash and £700,000 in shares, with up to £2m more to be issued in Mercia shares in two years’ time, contingent on future third party funds raised.

Enterprise Ventures chief executive Jonathan Diggines will become an executive director of Mercia and as well as receiving an annual base salary of £187,000 will enter an executive bonus scheme.

Mr Diggines said: “It was the natural choice for Enterprise Ventures to join the Mercia team thereby creating a market-leading position in funding and developing innovative British businesses, particularly in the underserved regions of the Midlands, the North of England and Scotland.

“Mercia is already at the forefront of providing funding and support to high growth, innovative companies. In joining together, we will not only be able to offer our existing Enterprise Ventures portfolio companies access to additional expertise and follow-on capital, but we will also strengthen our combined ability to support new businesses and technologies on their journey to success.”

The acquisition is a big step forward for Mercia, which wants to operate nationally “with a local presence in the underserved regions of the Midlands, the North of England and Scotland”.

The stock market-listed group also wants to expand its funnel of businesses it calls its Emerging Stars, which are innovative businesses in targeted technology sectors that are scalable and able to deliver significant shareholder value.

Mark Payton, chief executive of Mercia, said: “This strategically-focused acquisition further scales Mercia’s differentiated complete capital solution into the North of England, positioning the Group as the leading go-to investor in and supporter of great technology success stories in the Midlands, the North of England and Scotland.

 

“With the scale, geographic reach, access to capital and investment expertise that the enlarged business offers, this represents a significant step towards Mercia becoming the market leader for the funding and development of high growth innovative businesses within our chosen sectors and geographies.”