Mercia held a 25.5% direct holding in Intechnica at the date of completion and will receive cash proceeds of £3.7million, generating an internal rate of return (“IRR”) of 27% and a 1.7x multiple on its current holding value.
Based in Manchester, Intechnica is a leading provider of specialised IT and technology consulting services for private equity firms. Founded by Jeremy Gidlow and Andy Still, Mercia first invested in December 2013 through one of its managed funds and it subsequently became a direct investment in April 2017.
In addition to the direct investment return, three of Mercia’s third-party funds collectively held a further 27.9% providing a blended IRR on investment returns of 32.0% (2.6x on investment cost). Mercia has proactively supported Intechnica since its inception, building out the Board and then initiating the spin-out of a cyber security product developed by the founders – Netacea Limited. Will Clark, Mercia’s Managing Director of Regional Venture, was a board director at exit and remains on the board of Netacea.
Dr Mark Payton, CEO of Mercia Asset Management PLC, said: “Intechnica is a great Manchester-based business that, as with all our direct investments, has been supported by Mercia’s regionally managed funds since 2013. This full-cash exit delivers an excellent result for Mercia and allows Intechnica’s founders to focus on the continued growth of Netacea, an increasingly respected global brand in the cyber threat detection market.
“This is another direct investment exit above holding value, which continues to support our valuation methodologies.”