Mercia Asset Regulatory News (MERC)

Mercia Technologies PLC

First direct investment into new 'emerging star' from the Enterprise Ventures Group portfolio

Mercia Technologies PLC ("Mercia", "the Company" or "the Group"), which specialises in building, funding and commercialising innovative British businesses, is pleased to announce that it has agreed the Group's first direct investment sourced from the portfolio of investments managed by Enterprise Ventures Group ("EVG"), following its acquisition by Mercia on 9 March 2016. The acquisition of EVG, a leading provider of early stage and growth finance via third party managed funds in the North of England, has significantly expanded the Group's pipeline of direct investment prospects, where it provides follow-on investment capital from its own resources into 'emerging stars', with a goal of realising significant value for Mercia's shareholders over time. This first direct investment is an early confirmation of EVG's strategic benefit to Mercia and the Board anticipates that further direct investment opportunities will arise from the EVG portfolio over the near term.

Mercia has invested an initial £400,000, via a convertible loan note, in Concepta Diagnostics Limited ("Concepta"), which develops diagnostic devices for women's health. EVG has previously invested seed and early stage finance from its third party managed funds.

Based in York, and founded by a group of experienced scientists who previously worked for Unipath Limited in the fields of fertility and women's health, Concepta has developed a range of market-ready products. Its product range recently achieved product registration in one of its largest target markets, China, where the abolition of China's one-child policy is expected to drive significant demand for a cost-effective at-home fertility monitoring system as parents seek to have additional children. Concepta's product range provides reliable data to women for a variety of fertility applications, using proprietary disposable test strips and devices linked to a mobile app which captures levels of key fertility hormones in urine and builds an accurate and easy-to-understand "digital diary". 

Peter Dines, Investment Director and Head of Life Sciences at Mercia, said:

"The investment into Concepta reinforces the strategic rationale behind Mercia's acquisition of EVG, as a high-quality portfolio company within its portfolio. One of the key drivers behind the acquisition of EVG was to enable Mercia to expand the pipeline of opportunities from which it can make direct investments and Concepta is a perfect example of this strategy in action."

Investment Director Dr. Mark Wyatt, who has managed the third party investment for EVG, said:

"Having worked with Concepta for a number of years, I am pleased that this new investment will enable the company to move to the next stage of its development and bring this exciting technology to market. Typically, follow-on funding can be a real obstacle for the continued development and success of early stage companies but as part of Mercia, we are now able to support regional innovation all the way through its journey thanks to our access to Mercia's direct funding model. I am delighted that Concepta is the first of our innovative investments to benefit from this capability and look forward to continuing to work with the team to deliver Concepta's commercial success."

Erik Henau, CEO of Concepta Diagnostics Limited, said:

"We are delighted to work with Mercia. Its endorsement is a boost for our plans to make a major impact in the area of personalised healthcare. Our initial product offering will bring hope to millions of couples for whom conception is an agonising wait."

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About Mercia Technologies PLC

Mercia is a national investment group focused on the creation, funding and scaling of innovative businesses with high growth potential from the UK regions. Mercia benefits from 14 university partnerships and six offices across the Midlands, the North of England and Scotland, providing it with access to high quality, regional deal flow. Mercia is quoted on AIM with the epic "MERC".

Mercia's "complete capital solution" investment model initially nurtures businesses via its third party funds under management (expanded to circa £220 million following its acquisition of EVG) and then over time Mercia can provide further funding to its emerging stars thanks to its ability to deploy direct investment follow-on capital from its own balance sheet.

In a recent report (Source: Beauhurst, The Deal, 2015/16), Mercia was found to be the fifth most active investor in the UK and the fourth most active in technology. Since its IPO in December 2014, the Company has invested over £20 million directly across its portfolio of emerging stars and continues to seek both early stage third party investment opportunities as well as providing its Emerging Stars with the required capital and management support to build towards exits that will realise incremental value for Mercia shareholders.