Dunedin Ent.it. Regulatory News (DNE)

17 Nov 2005 14:31

Dunedin Enterprise Inv Trust PLC17 November 2005 For Release 17 November 2005 Dunedin Enterprise Investment Trust PLC Davenham Group plc proposing to float on AIM with a £65 million capitalisation Dunedin Enterprise Investment Trust PLC ("Dunedin Enterprise" or the "Trust"),which specialises in the provision of equity finance for management buyouts,management buyins and growing businesses, today announces that it will realisepart of its investment in Davenham Group plc ("Davenham" or the "Company") oncompletion of the proposed flotation of Davenham on AIM. Davenham has announced a successful Placing at 254 pence per share, raising£44.6 million. Admission to trading on AIM is expected to take place anddealings are expected to commence on Tuesday 22 November 2005. On the basis of Davenham's announcement, Dunedin Enterprise will receive netproceeds of £11.2 million and will retain 2,561,968 ordinary shares in DavenhamGroup plc valued at £6.5 million at the placing price. Dunedin Enterprise'stotal consideration of £17.7 million represents an increase of £5.1 million,over its valuation of Davenham at 30 April 2005, a 40% uplift. This represents amultiple of four times Dunedin Enterprise's original investment (including £2.5million of investment income). Manchester-based Davenham is a leading independent asset based lender in the UK.It provides lending solutions designed to meet the financing needs of SMEs -typically involving loans of between £10,000 and £3 million. This is anattractive market place that is not adequately serviced by mainstream lenders,which tend to adopt a formulaic approach to lending decisions. Davenham has adiverse loan portfolio, with its lending activities organised into threedivisions: property finance, asset finance and trade finance. Dunedin Enterprise invested £5 million in Davenham in June 2000 when it led themanagement buyout ("MBO") of the company from Bermudan based Bank of NTButterfield & Son. Davenham's Directors believe that a float on AIM at this time will enable theCompany to accelerate its growth plans by strengthening its ability to lend,expand into the Midlands and the South of the UK, and fund selectiveacquisitions. Brian Scouler, Managing Director, Portfolio, of Dunedin Capital Partners, theManager of Dunedin Enterprise, said: "We have been a shareholder in Davenham since 2000 when we led its managementbuyout. We have been delighted with the strong growth of the Company since thenand are very pleased by the positive response to the Placing. This has allowedthe Company to raise additional capital for growth whilst allowing DunedinEnterprise to realise a significant proportion of its investment. This has beena very successful investment for Dunedin Enterprise which will remain asupportive shareholder of Davenham following its AIM flotation." ENDS For further information, please contact: Dunedin Capital Partners Limited Brian Scouler, Managing Director, Portfolio 0131 225 6699 07811 262796 Davenham Group plcDavid Coates, Chief Executive 0161 832 8484Steve Marsh, Managing DirectorPaul Burke, Finance Director PR to Dunedin: Binns & Co PR Limited Peter Binns 0207 153 1477Chris Steele 0207 153 1481 PR to Davenham: Smithfield Reg Hoare 0207 903 0629Katie Hunt 0207 903 0603 EDITORS NOTES 1 Dunedin Dunedin Capital Partners provides equity finance for management buyouts andmanagement buyins with a transaction size of £10 million - £50 million. It is anindependent private equity house, owned by the directors and staff, operatingthroughout the UK from offices in Edinburgh and London. Dunedin invests inestablished companies, in a broad range of industry sector, which demonstrate ahistory of sales and profit growth. It helps to define and reach the strategicgoals of these investee companies whilst empowering the management teams thatrun them and provides additional capital for growth if required. Dunedin CapitalPartners is authorised and regulated by the Financial Services Authority and isa member of the BVCA and the EVCA. In the year ended 30 April 2005, Dunedin Enterprise realised a total of £36.5million. This included the flotation of Goals Soccer Centres and Jessops, thesale of Earls Court & Olympia and the recapitalisations of CGI and ABI. Theserealisations generated a profit of £8.9 million over the valuation of theseinvestments at the start of the year, an uplift of 44%. 2 Davenham Group plc Davenham is a leading, independent asset based lender to the UK SME sector. The business was founded in 1991 in Manchester from where its core operationsare run. In recent years, the Company has begun to expand and now also operatesfrom offices in Leeds, Birmingham, Liverpool and Newcastle. Davenham's client base comprises c2,400 UK SMEs, typically with a turnover ofbetween £1 million and £5 million, and with fewer than 50 employees. Davenham'sDirectors estimate that there are approximately 80,000 such companies in the UKand their number is growing. Davenham has a strong financial record both in terms of revenue growth andprofitability and has consistently achieved a gross return on loan portfolio ofcirca 20 per cent. The Directors believe that this is as a result of Davenham'sposition as a leading lender in a profitable and niche market place in which thecompetition is fragmented. This information is provided by RNS The company news service from the London Stock Exchange