Midven generates massive returns after £9m deal
A LEADING Midlands venture capital company has realised its investment in a Staffordshire software firm following the £9m sale of the business.
Midven generated an eight times cash multiple return on its investment in Dynamic Change following the firm’s acquisition by Allocate Software.
Midven’s Advantage Growth Fund, which provides venture capital to SMEs in the West Midlands, invested in Dynamic Change in 2003 at a time when the company had just two customers.
The company, based at Keele Science Park, has grown significantly since then and now has 121 customers.
If the full consideration is achieved the AGF’s return will increase to 14 times the cash invested.
Roger Wood, director of Midven, said the funding of Dynamic Change was another example of how well-managed venture capital funds with a regional focus could generate excellent returns for their investors.
“This is the fourth highly profitable exit from the Advantage Fund, and the second in six months.
“This demonstrates that despite the economic environment, fast growing and profitable companies are still highly attractive acquisition targets,” he said.
He said the West Midlands region was proving itself to be a good home for technology-based businesses and with significant new funds to invest, Midven was hoping to achieve similar successes.
Mil Milojevic and Hugh Ashley, founders and directors of Dynamic Change, said: “We have worked closely with Midven over the last 10 years and their financial and strategic support has enabled us to grow the business significantly.
“The strategic fit between Allocate and Dynamic Change is excellent for both customers and staff and the timing is right for the company to move into the next stage of its growth strategy as part of a larger group.”
Dynamic Change provides regulatory compliance, corporate governance, risk and performance management software to the UK healthcare market.
AIM-listed Allocate Software supplies software to health, education and other public sector bodies.
Birmingham-based Midven, which recently announced the launch of the Exceed Advantage Fund for the West Midlands, manages five funds in total and aims to invest in innovative and entrepreneurial companies with strong growth prospects in the Midlands and beyond.
The shareholders of Dynamic Change were advised by law firm Eversheds, led by corporate partner James Trevis and assisted by solicitor Jon Gill.
Mr Trevis said: “Dynamic Change is an excellent local success story – an entrepreneurial business supported by a Birmingham venture capital community that has gone on to great things and deliver value to all stakeholders.
“We were delighted to work with the team in achieving this impressive exit.”
Corporate finance advice was also provided by Cobalt Corporate Finance.
