How was the deal introduced?

The company was originally introduced by David Whitehead from The Co-operative Bank in Leeds. We have developed a strong working relationship with the management team and have undertaken multiple funding rounds over the past five years.

What did the company plan to use the initial funds for?

The first round of funding supported the purchase of second-hand manufacturing equipment from the USA which could not easily be funded by traditional asset finance. Subsequent rounds have been used for property improvements and new product development.

What progress has the company made since the first investment?

Over the course of the past four years, the company has grown turnover by £8m, and now generates an EBITDA of over £3m per annum, strengthening the balance sheet by £5m. It has also created three new divisions as part of its investment and diversification. 

The Mercia Effect

What have we been able to do for this company as a result of our involvement?

The relationship with the company has strengthened during our journey together. We understand what the management are seeking to achieve and have faith in the bold decisions they have made in diversifying from the historic core bulk chemicals business. Mercia’s support has given Rosehill the additional financial resource needed to take risks and innovate, which mainstream banks had been unwilling to do. As a direct result, the management team continues to engage Mercia’s Investment Team to source new finance when required, as evidenced by the number of loans we have completed for them over the last few years.

“These investments have allowed us to move forward with our plans to increase production capacity, improving efficiency and continue to develop the product range.”Dr Alexander Celik, Rosehill Polymers

How was the deal introduced?

Initially, the business was referred to one of Mercia’s legacy funds via the then non-executive board member, Paul Dickinson, who had a long-standing relationship with the fund team. From that initial conversation, four separate loans were made to the business over a number of years, demonstrating the enduring strength of the relationship with the company.

What did the company plan to use the initial funds for?

To enable a second bore hole to be established to secure future supply.

What progress has the company made since the first investment?

The company has gone on to treble turnover and become highly profitable. It has won awards for the quality of its product and has become the premium British spring water.

The business had been hampered only by production capacity, and a subsequent loan through EV SME Loans assisted in the installation of state-of-the-art production lines, that should easily see the business achieve £50m turnover.

The Mercia Effect

What have we been able to do for this company as a result of our involvement?

The main directors consider Mercia to be part of their ‘corporate family’ and more than just a funder. The funds and the Investment Manager supported the company through a very difficult time when their existing lender was unwilling to provide further funding to the business.  Mercia’s Investment Manager provided a facility which ensured the business could achieve its growth ambitions. As a result, the company continues to use Mercia for finance alongside traditional finance from mainstream banks.

“Mercia is a valued partner to Harrogate Spring Water and has demonstrated this through a good understanding of our business and our related funding requirements. Our Investment Manager made the funding application and ongoing monitoring requirements as pain free as possible allowing us to focus on growing our business. We look forward to developing the relationship further”Damien Wilkinson, Harrogate Spring Water

How was the deal introduced?

The team was initially introduced to the company by Steve Wall from Access 2 Finance in 2014. Our detailed knowledge of the business enabled us to provide further support four years later.

What did the company plan to use the initial funds for?

The first round of investment was utilised to support bank facilities to merge the businesses of Baldwin Technical Services Limited and Sugden Limited.  The integration was successful and in 2018 Mercia provided a second loan alongside new bank facilities allowing Sugdens to relocate to new purpose-built factory premises, proving much improved manufacturing facilities.

What progress has the company made since the first investment?

This company has grown significantly. The combined business has increased turnover from £5.2m to almost £10m, with profits rising from £655,000 to £1.3m. The company has also been able to materially increase its presence in export markets, installing equipment in areas such as New Zealand, Australia and USA.

The Mercia Effect

What have we been able to do for this company as a result of our involvement?

The flexibility of investment in terms of providing gap funding, has helped them enormously. Whilst the loans have been structured over a five-year term, the company retains the flexibility to repay loans early without penalty if it has surplus cash available. We have been able to make introductions to BOOST (Lancashire’s growth hub) and through that the company has received help and support with its export drive. We also take a pragmatic view in terms of security, preferring to concentrate on operating cash flow and the company’s ability to repay its debt, rather than being ‘hung up’ on tangible security to cover the loan.

“Without the financial help from Mercia’s fund, the move to the new site for Sugden would have been delayed by at least two years, which would have compromised further orders that are in the pipeline from all over the world. We need the space and flexibility that the new site will bring to our company. We would like to thank the fund and RBS for their continuing support.”Chris Baldwin, Sugden