Braveheart Inv Regulatory News (BRH)

24 Jun 2009 07:00



24 June 2009

Braveheart Investment Group plc

('Braveheart' or 'the Group')

Strathclyde Innovation Fund makes maiden investment in PSI Electronics Ltd

Braveheart (AIM: BRH), the technology commercialisation and investment management company, announces today that it has made its first investment from the Strathclyde Innovation Fund ("SIF" or 'the Fund'). The £260,000 funding into PSI Electronics Ltd ("PSI" or "the Company") comprises funds from SIF, Scottish Enterprise's Scottish Co-investment Fund and existing investors. The investment is Braveheart's third funding round into the Company.

PSI Electronics 

PSI, a spin-out from the University of Strathclyde, is developing a suite of intelligent cable fault locators that seek to detect cable faults in Low Voltage ("LV") power cable networks quickly and efficiently. The current cable network in the UK is between thirty and forty years old and deterioration in the insulation qualities of cables means that ageing LV cable installations are increasingly likely to develop faults which can cut off the power supply to large areas. Due to the complex nature of the UK cable network it is both difficult and expensive currently to detect the exact location of a fault. Several expensive excavations are often required to pinpoint the fault and the costs of these, coupled with the penalties imposed by regulators for downtime, can be substantial.

PSI estimates that its simple-to-use technology, which uses advanced digital signal processing techniques, offers a 60% reduction in both costs to locate faults and in repair time, as well as increasing the number of faults detected. This new round of funding will provide PSI with the capital to launch its first cable fault locator for the detection of permanent faults in LV power cables and will allow development of the Company's second product to be completed.

Strathclyde Innovation Fund 

An agreement to create the Strathclyde Innovation Fund was announced in 2007 by Braveheart and the University of Strathclyde. SIF has the exclusive right of first refusal to fund all commercial investment opportunities that arise in respect of intellectual property emanating from the University of Strathclyde. The fund is unique in its structure and is the first of its kind in a UK higher education institution.  A first closing of the fund was achieved in September 2008, with initial commitments totalling £4.5 million from investors including Braveheart, the University of Strathclyde and Strathclyde alumni. This also included Scottish Enterprise's Scottish Co-investment Fund, which will co-invest alongside the SIF by committing a specific allocation for use by SIF.

Commenting, Chief Executive of Braveheart, Geoffrey Thomson, said, "PSI's technology has the potential to revolutionise fault detection and repair in low voltage power cable networks. Braveheart remains encouraged by the potential of PSI and is pleased to continue to support the Company with this first investment from the Strathclyde Innovation Fund."

Martin Stewart of PSI Electronics added, "There is a clear unmet market for more efficient and cost-effective fault detection and our technology is targeted at fulfilling this demand. This further investment will allow us to continue the progress we have made in developing our pipeline of products."

For further information please visit www.braveheart-ventures.co.uk and www.psi-electronics.com or contact:

Notes to Editors

Braveheart

Braveheart Investment Group is a technology commercialisation and investment management company based in Perth, Scotland. Since its formation in 1997 it has made the transition from start-up angel syndicate to fully listed company. Braveheart's shares listed on AIM in March 2007.

Investments are made in young, emerging, unlisted companies where there is potential for significant growth through successful commercialisation of IP and Braveheart enjoys close relationships with several universities to identify emerging technologies. Investments are predominantly technology-focused; however the Group also maintains limited exposure to more traditional businesses.

Braveheart's diverse portfolio currently comprises over 30 companies and it has completed over 80 deals in its eleven year history, including six IPOs, three trade sales and eight write-offs and has an exit IRR of 33%.

At the 2008 Ernst & Young Entrepreneur of The Year Awards (Scotland) Braveheart CEO Geoffrey Thomson was given a special award recognising his contribution and support of emerging technology businesses in Scotland over the past decade.

On 8 June 2009 the Group announced the acquisition of Inkopo Limited. This acquisition, based principally on an earn-out consideration, gives the Group an established presence in Yorkshire, an additional revenue stream and further complementary income from investment facilitation and management activities.

The Strathclyde Innovation Fund ("SIF" or "the Fund")

SIF will operate for an initial period of eight years, extendable to 10 with the agreement of the partners in the fund.

Braveheart Investment Group is an investor in SIF and its operating subsidiary Braveheart Ventures also acts as Fund Manager. Under the terms of the partnership, 25 per cent of the Fund Manager's performance bonus is paid back to the University, providing it with further direct benefit from those opportunities which succeed in generating returns. SIF also makes a small contribution to the running costs of a department that sponsors a successful investment application.

The commitments made at first close are over a five year period and provision has been made for additional closings to bring in other potential partners over the next two years. PSI is the first investment made by the Fund.

Scottish Co-Investment Fund (SCF)

The Scottish Co-Investment Fund is a £72 million equity investment fund set up by Scottish Enterprise and part funded by the European Regional Development Fund (ERDF). Its mission is to invest from £100,000 to £1,000,000 in company finance deals of up to £2 million.