Mercia Technologies PLC, a Midlands based leader in the funding and commercialisation of technology businesses in the UK, has acquired the remaining 80% interest in the Mercia Fund 2 Limited Partnership (MF2), for a total consideration of £3.3m, as envisaged when the Group listed in December 2014.
MF2 is a 10 year early stage investment fund which makes investments into university and non-university start-ups. The fund was established by Mercia’s wholly owned FCA authorised subsidiary, Mercia Fund Management (MFM) in 2007.
At the time of Mercia’s Admission to AIM, the Group acquired a 20% interest in MF2 and agreed to make an offer to each remaining limited partner to purchase their respective interests for cash or Mercia shares, based on an aggregate portfolio valuation of £4.1m.
Aston University and the University of Birmingham, two of the limited partners, have elected to invest their consideration in Mercia shares at 65.34p per share. As a result, six of the Groups’ nine university partners are now Mercia shareholders.
In due course, Mercia will become the beneficial owner of MF2’s holdings in 11 technology companies, five of which Mercia already has a direct stake in.
This transaction completes Mercia’s consolidation of its business operations, creating an effective blend of tax-efficient private investor capital under management by MFM, leading to direct investment into emerging stars from the MFM portfolio, which itself has now grown to 40 companies. This transaction will lead to Mercia owning direct stakes in 18 companies.
Mark Payton, Chief Executive of Mercia Technologies PLC, said:
“The acquisition of Mercia Fund 2 is the final step in moving Mercia from the traditional venture capital model to a blended investment approach, matching investment risk and reward against investor requirements.
“Mercia Fund 2 will provide us with material stakes in a number of exciting technology businesses.
“I am particularly pleased that six of our university partners are now Mercia shareholders – a strong endorsement of our investment proposition.”