Technology investor announces plans for £40m fundraising

Specialist investor Mercia Technologies is to raise £40m through a new share placing to fund the continued growth of its existing portfolio and to finance new opportunities.

The Henley-in-Arden group, which is focused on the creation, funding and scaling of innovative technology businesses with high growth potential, is placing 86,956,521 new shares at 46p each.

The placing price represents a discount of approximately 8.9% to the closing mid-market price of 50.5p per ordinary share on January 30, 2017.

In a statement to the markets, the group said that once completed, the gross proceeds from the placing was expected to be approximately £40m.

“The primary purpose of the placing is to accelerate the development of the group’s existing portfolio companies and to capture the opportunity to invest in new direct investment opportunities across its target sectors nationally and specifically within the UK regions,” it said.

It added that the number of investment opportunities had been significantly enhanced due to the acquisition of Enterprise Ventures Group last March. This took number of investee technology companies in the group’s third party managed funds from around 35 to 150.
“Together with the potential for a marked growth in capital deployment over the coming 12 to 24 months, the directors are also optimistic about the commercial opportunities facing the group’s portfolio companies as a whole and their potential for delivering shareholder returns,” it added.

The directors said they were therefore confident that the placing would significantly enhance shareholder value over the medium term, via sustained growth in net asset value.
Mark Payton, chief executive of Mercia Technologies, said the placing represented the next step in the group’s growth.

“Since IPO in December 2014, we have made substantial progress in establishing Mercia as a leading investor in innovative companies across the UK’s capital-underserved regions. We have a growing portfolio of direct investments where we see significant exit potential in the years ahead, as recently demonstrated by the sale of Allinea Software to ARM, the world’s leading semiconductor IP company,” he said.

“Moreover, we have a greatly enlarged pipeline of future investment prospects in our substantial managed funds, underpinning our confidence in the potential to increase capital deployment over the next few years in both new and existing ‘Emerging Stars’. The placing will support these growth ambitions, utilising our Complete Capital Solution to significantly enhance shareholder value in the medium term.”
Shareholders will be asked to approve the placing at a general meeting on February 16.