Mercia sells stake in biotech EIS portfolio business spun out from the University of Birmingham

 

Specialist asset manager, Mercia Asset Management PLC which has £800.0million of assets under management including more than £50.0million of EIS capital,  has sold its stake in  The Native Antigen Company , a leading producer of infectious disease reagents, to global life sciences tools company LGC .  The sale of The Native Antigen Company is for a total cash consideration of up to £18.0million.

The company, which was spun out of the University of Birmingham and backed by Mercia’s EIS funds since 2013, has generated its EIS investors a multiple of more than eight times the original investment, equivalent to an investment rate of return (IRR) of 36%.

The Native Antigen Company is one of the world’s leading suppliers of antigens that are used in antibody testing kits for and research into emerging diseases. It was one of the first companies to start production of the COVID-19 antigens in February this year and has been heavily involved in the fight against the virus since then. The company also played a key role in supplying products to combat both the Zika and Dengue virus in 2016 and 2018.

Mercia, which across the Group held a 49.4% stake in the business, has supported the company since it commenced trading, investing from both its EIS funds and its own balance sheet. Mercia’s Chief Operations Officer Peter Dines who also acts as Fund Principal for the EIS Funds sat on the company’s board as a Non-executive Director between 2015 until today’s exit was announced.

At the EIS fund level, the Native Antigen Company realisation in addition to previous exits, has returned in excess of two times (2x) invested capital.  This supports the Mercia EIS Fund strategy of creating diversified early-stage technology funds for its investors.

The acquirer, LGC, is a global leader in the life sciences tools sector and hosts the UK National Measurement Laboratory. The company provides a comprehensive range of specialty genomic analysis tools, measurement tools and supply chain assurance solutions, underpinned by leading analytical and measurement science capabilities.

Dr James Wilkie, CEO of University of Birmingham Enterprise, saidWe are delighted that the Native Antigen Company, which started life as a University of Birmingham spinout, has gone on to become one of the world’s leading suppliers of infectious disease reagents, and made such a huge contribution to the frontline fight against COVID-19.  We look forward to hearing about the continued success of the company and its technology following this acquisition.”

Dr Nick Roesen, CEO of The Native Antigen Company saidJoining LGC is a very exciting new phase in the development of the Native Antigen Company. We will be an integral part of LGC’s fast growing clinical diagnostics business and we are excited to join such a well-respected organisation that shares our purpose and mission, and that will support our diagnostic customers by providing even more world-leading products and services.”.

Dr Mark Payton, Mercia Asset Management, CEO, said the deal demonstrated Mercia’s ability to grow value through the life cycle of a company: “Mercia and our university partners play a critical role in creating some of the UK’s most exciting regional businesses scale. Our EIS Funds are instrumental in supporting early stage businesses as has been the case with The Native Antigen Company.  I am proud of the part Mercia has played in the company’s journey, not just as the major capital provider, but also as a critical partner in helping the business to achieve its potential.”

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Forward Group establishes a collaboration with WME on the basis of their common interest in supporting and investing in the UK’s leading university spinouts.

Management buyout leads to the creation of the third-party fund manager Mercia Fund Management with 3 employees and £12.0million of AuM

Forward Group becomes a shareholder in Mercia Fund Management. It launches the full funding model of early-stage investment from third-party funds to follow-on direct investment from the balance sheet (the Complete Capital Solution).

Mercia Fund Management raises the first hybrid Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) fund to come onto the market.

Mercia Fund Management relocates from Birmingham to Forward House in Henley-in-Arden (West Midlands).

Mercia Fund Management increases the number of university partnerships to nine across the Midlands, with £22.0million under management through third-party funds.