£11m deal accelerates tech investment firm’s national ambitions
MERCIA TECHNOLOGIES has accelerated its plans to become a national technology investment business with the £11m purchase of Enterprise Ventures Group.
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 .
It manages money on behalf of third party funds, including the European Regional Development Fund and the European Investment Bank, and is able to invest up to £2m into businesses.
Enterprise Ventures chief executive Jonathan Diggines, who will become a director of Mercia, said: “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, added: “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.”
The deal is initially for £9.0m, made up of £8.3m cash and £0.7m in shares, with up to £2.0m more to be issued in Mercia shares in two years’ time, contingent on future third party funds raised.
For the year to March 2017, revenues from Enterprise Ventures are forecast to be £4.5m and post-tax profits are forecast to be £0.8m.