Direct Investments

Sale of OXGENE delivers strategic objective of ‘evergreening’ Mercia’s balance sheet

1st March, 2021

Mercia is pleased to announce the profitable sale of OXGENE.

Mercia held a 32.1% direct holding in Oxgene at the date of completion and will receive cash proceeds of £30.7million, its largest cash exit to date.

The sale results in a realised gain of £14.6million above Oxgene’s £16.1million direct investment holding value as at 30 September 2020. The sale has generated a 5x return on Mercia’s direct investment cost of £6.1million and a 51% internal rate of return (“IRR”).

Mercia first invested in Oxgene in July 2013 through its third-party managed EIS funds and it subsequently became a direct investment in December 2015.

In addition to the direct investment return, the sale has generated returns of between 13x and 20x investment cost for five of Mercia’s EIS funds, generating fund IRRs of between 38% and 49%. Mercia has proactively supported Oxgene since its beginning, including representation throughout on Oxgene’s board by Mercia’s Chief Executive Officer, Dr Mark Payton.

Dr Mark Payton, CEO of Mercia Asset Management PLC, said:

 “Oxgene is a great business and we are proud of the role Mercia has played, proactively supporting the team from its founding through to this landmark transaction, which will enable the business to continue its pioneering work. The sale of Mercia’s shareholding in Oxgene demonstrates both the power of our regional networks and the strength of our unique Complete Connected Capital model. This exit therefore delivers an excellent result for Oxgene’s founders and employees, our shareholders and our third-party EIS fund investors.

This event is also a significant milestone for Mercia as the exit proceeds now ‘evergreen’ our balance sheet; another of our key strategic objectives. The full cash sale of our second largest direct investment will enable the Group to support and expand its direct investment portfolio for the foreseeable future. We continue to believe that this diversified portfolio, in terms of sector and stage of development, offers further promise over the near to medium term.

Finally, this transaction reaffirms the significant opportunity and value creation potential offered by Mercia’s ‘funds first’ hybrid investment model, focused on promising companies located outside of London and in what we term ‘The Thriving Regions’.”

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