EV Growth Fund

Single largest investment to date

Mercia Fund Managers has invested almost £8.0million into a North East-based traffic management business in its largest single transaction to date.

The investment in Total Resources UK Limited includes growth, debt and venture funding and will allow the business to expand its existing depot network across the UK, creating up to 100 jobs. Total Resources, which is based in Boldon in South Tyneside with depots in Gateshead, Haydock, Leeds, Kidderminster, Mansfield and Essex, provides services ranging from the design and installation of temporary traffic management schemes to portable traffic light hire. Established in 2015, it employs over 110 staff and serves customers in the utilities and highways sectors including SSE, Northumberland water, Kier and Murphys.

The investment – which includes funding from Mercia’s EV Growth II and EV SME Loans funds - will provide an exit for one of the founders, John Smart, giving control of the business to the existing management team led by CEO Les Thompson. The deal also includes investment from the North East Venture Fund (NEVF), supported by the European Regional Development Fund and managed by Mercia, to support the growth of the business.

Les Thompson, CEO of Total Resources, said: “We have exciting growth plans for the business and are looking forward to working with Mercia to put them into place. The investment will enable Total Resources to become a major force in the highways sector with depots nationwide.”

Wayne Thomas, Matt Molyneux, Chris Pestell, Jan Oosthuizen and Ian Wilson from Mercia worked on the deal.

Wayne Thomas, who leads the EV Growth team and led the transaction, said: “Although Total Resources is a relatively new business, the management team have a long history within the sector and we have been impressed by their knowledge and progress so far. The business has grown on the back of a strong commitment to customer service and delivery which will help to propel its growth over the coming years.”

Paula McGrath and Andrew O’Mahony of Brabners advised newco. Paula McGrath, Principal of Brabners Corporate Finance, who led the negotiations with investors, said “Brabners’ integrated Corporate Finance & Legal team worked alongside Mercia and Total Resources to deliver a successful transaction. Mercia was chosen as the funding partner because the team demonstrated a real understanding of the dynamics of the market and because of their commitment to providing management with support going forward. We look forward to working with Total Resources and Mercia to develop the business over the coming years.”

Craig Scott of Hill Dickinson provided legal advice to Mercia. Financial due diligence was carried out by Sentio Partners.

According to data from www.utilityweek.co.uk investment in the UK utilities sector is expected to increase to over £50.0billion between 2020 and 2025, representing a 13% increase on the current five year period.