Last checked at 9 Jul 2020 07:00
RNS | 9 July 2020 |
Mercia Asset Management PLC
("Mercia" the "Company" or the "Group")
Sale of The Native Antigen Company
Mercia Asset Management PLC (AIM:MERC), the proactive, regionally focused specialist asset manager, is pleased to announce the profitable sale of The Native Antigen Company Limited ("NAC") to LGC, a global leader in the life sciences tools sector, for a total cash consideration of up to £18.0million.
Mercia held a 29.4% fully diluted direct holding in NAC at the date of sale and will receive initial cash proceeds of £4.8million, with up to a further £0.4million receivable upon finalisation of customary closing working capital calculations.
Based upon the total anticipated amount receivable of £5.2million, the total realised return above the £2.7million holding value as at 30 September 2019, will be a further £2.5million. Of this, £0.6million will be included as a fair value increase in the Group's results for the year end ended 31 March 2020, which will be announced on 14 July 2020. The remaining balance of £1.9million will be recognised as a realised gain in the Group's interim results for the six months to 30 September 2020.
The sale is anticipated to generate an 8.4x return on its original direct investment cost and a 65% internal rate of return ("IRR").
Mercia first invested in NAC in 2011 through its third-party managed funds (which as at 31 March 2020 held an additional combined 20.9% stake) and subsequently, from its own balance sheet as a direct investment in December 2014.
In addition to the direct investment returns, the sale will generate a 12.1x return on a blended third-party managed funds investment cost and a 31% funds IRR. Mercia has proactively supported NAC since its first day of trading, including representation from Mercia's Chief Operating Officer Peter Dines, as a non-executive director on the NAC board through to exit.
Founded in 2010, as a divestiture from a University of Birmingham spinout company, NAC has become one of the world's leading suppliers of infectious disease reagents and is widely acknowledged to be a primary source of reagents for the study of emerging diseases.
Dr Mark Payton, Mercia Asset Management, CEO, said: "Keeping to our commitment of realising balance sheet investments within a three to seven year period from initial investment, NAC is the fourth full cash exit from our direct investment portfolio. It has been an excellent investment for Mercia and this sale is a strong demonstration of the value which our differentiated model can create; for investors in our managed funds, shareholders in Mercia and the founders we back. NAC is an example of an innovative regional business sourced through Mercia's network, supported initially by our managed fund capital and then scaled using our own balance sheet capital.
"Mercia plays a critical role in helping the UK's most exciting regional businesses scale and I am proud of the part we have played in NAC's journey, not just as the major capital provider but also as a critical partner in helping the business achieve its potential. I look forward to watching as they continue to go from strength to strength with their new owner."
Ends
For further information, please contact:
Mercia Asset Management PLC Mark Payton, Chief Executive Officer Martin Glanfield, Chief Financial Officer www.mercia.co.uk
| +44 (0)330 223 1430
|
Canaccord Genuity Limited (NOMAD and Joint Broker) | +44 (0)20 7523 8000 |
Simon Bridges, Richard Andrews | |
N+1 Singer (Joint Broker) | |
Harry Gooden, James Moat
| +44 (0)20 7496 3000 |
FTI Consulting
| +44 (0)20 3727 1051 |
Tom Blackwell, Louisa Feltes, Antonia Powell | |
mercia@fticonsulting.com | |
About Mercia Asset Management PLC
Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of balance sheet, venture, private equity and debt capital: the Group's 'Complete Connected Capital'. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.
The Group has a strong UK regional footprint through its eight offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia currently has c.£800million of assets under management and, since its IPO in December 2014, has invested over £90million across its direct investment portfolio.
Mercia Asset Management PLC is quoted on AIM with the epic "MERC".