Mercia Asset Regulatory News (MERC)

Mercia Technologies PLC

("Mercia", "the Company" or the "Group")

Two major contracts secured for Northern Powerhouse Funds

Mercia (AIM: MERC), the national investment group focused on the creation, funding and scaling of innovative technology businesses with high growth potential from the UK regions, is pleased to announce that it has been successful in its bids, via its wholly-owned subsidiary Enterprise Ventures Limited, to manage two of the British Business Bank's ("BBB") new Northern Powerhouse Investment Funds ("NPIF").

Following a highly competitive procurement process managed by the BBB, the Group has secured £108.5million across two mandates; a £57.5million equity fund and a £51.0million debt fund.

The funds will be deployed via Mercia's North of England offices, which will be focused primarily on investing in SMEs in Yorkshire, the Humber and Tees Valley regions, where the Group already has a successful track record of supporting start-up and later stage companies that have high growth potential.

These new fund mandate wins represent further strategic progress for Mercia. As a result of the two awards, Mercia has increased its third party funds under management by nearly 50% to over £336.5million, which over time will further increase the pipeline of potential direct investment opportunities for the Group.

Dr Mark Payton, CEO of Mercia Technologies PLC, said:

"We are delighted that, in a highly competitive field, the Group has been selected to manage two Northern Powerhouse Investment Funds. The new funds are strongly aligned with Mercia's 'Complete Capital Solution' and our strategic aim to invest in the UK's underserved regions, supporting the next generation of businesses with high growth potential, where we are already very active.

These two new funds will play a leading role in the development of innovative small businesses located in the North of England. The Group is well placed to manage these new mandates having already delivered several notable successes for similar public and private funds, including Blue Prism Group PLC, Optibiotix Health PLC, Xeros Technology Group plc and Concepta PLC. We are looking forward to working with the BBB on the successful delivery of these new mandates over the coming years.

Mercia's strategy is to create value for its shareholders and investment clients by finding and funding innovative businesses in the UK regions, initially by investing the third party funds and subsequently by taking direct stakes in 'Emerging Stars' as they successfully scale up. These two new funds will further strengthen Mercia's ability to generate attractive returns for both managed fund investors and shareholders."

The Northern Powerhouse Investment Fund project is supported financially by the European Union, attracting investment from the European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020, and the European Investment Bank. 

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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 18 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 Technologies PLC is quoted on AIM with the epic "MERC".

Mercia's 'Complete Capital Solution' initially nurtures businesses via its third party funds (with more than £336.5million under management following these latest mandate wins) and then over time Mercia can provide further funding to its 'Emerging Stars' by deploying direct investment follow-on capital from its own balance sheet.

Since its IPO in December 2014, the Company has invested over £30.0million directly across its portfolio of 'Emerging Stars'.

About the Northern Powerhouse Investment Fund

The NPIF will invest in Microfinance, Business Loans and Equity Finance funds, ranging from £25,000 to £2.0million, specifically to help small and medium sized businesses secure the funding they need for growth and development. It is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK's national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.

The NPIF is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company. It covers the following LEP areas: Tees Valley Unlimited, Greater Manchester, Cheshire and Warrington, Cumbria, Liverpool City Region, Lancashire, Humber, Leeds City Region, Sheffield City Region, York, North Yorkshire and East Riding. The appointment of the NPIF fund managers is subject to contract.

The project is receiving up to £140,359,192 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Communities and Local Government is the Managing Authority for the European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding. The funds which NPIF invests are open to businesses with material operations, or planning to open material operations, in, Yorkshire and the Humber, the North West and Tees Valley.