We are seeing increased levels of private equity investment in the East of England to support management teams accelerate growth or to support Management Buy Outs (“MBOs”) and shareholder retirement plans.
Some may view private equity investment negatively, perhaps due to the perception it requires aggressive returns, intrusive Board involvement and the loss of control. However, whilst this type of investment is not for everyone, private equity is changing, with an increased number of funds having regional representatives on the ground, avoiding “men in black suits from London” appearing at Board meetings with strict KPIs. Foresight for example, has recently launched a £100m East of England Fund and have an office in Cambridge.
There are also now several examples in the region of successful minority investments by these funds. In the last month, JDC have advised on two transactions with private equity investors in Norfolk (see below). Both of these transactions show how investors can work with management to structure a deal that works for all: providing investment to support growth plans without giving away majority control. Some funds, such as the Business Growth Fund’s (“BGF”), also take a longer term view on investments, with no set deadline for returns and many can provide expertise and relationships to support growth plans.
Other recent examples include Octopus Investments’ minority investment in Oxifree in 2015, BGF’s minority investment in Norwich based Cornwall Insight last year, and Maven Capital Partners’ minority investment in GEV Offshore in 2015 (all advised by JDC Corporate Finance).
When needed, private equity investors can support shareholder retirement plans or MBOs with a majority investment such as Merino Private Equity’s investment in Norfolk based Tobar Group, and the syndicated investment by Mobeus and Capital Connection in Norwich based Virgin Wines and EV Private Equity’s majority investment in Aquaterra Energy in 2017 (advised by JDC).
JDC secures £2.4m minority investment in bf1systems
Founded in 1994, bf1systems designs, manufactures and distributes high precision components, which are used in every major motorsport series around the world, including Formula 1TM, as well as by performance road cars, including Bugatti, Ferrari and Porsche. The business employs more than 100 people at its manufacturing hub in Norfolk.
JDC recently secured £2.4m investment in bf1systems from BGF. The minority investment will support bf1systems’ long-term growth strategy, including the expansion of its product offering and development of new partnerships.
In assisting bf1systems to secure this equity investment, JDC liaised with several competing private equity houses before BGF were identified as the preferred investment partner. JDC acted as lead adviser through each stage of the investment from initial contact, through valuation and negotiation to completion.
JDC secures sale of 3sun Group to Worley Limited – the end of a long journey together
3sun Group is the UK’s market leading provider of offshore wind installation, inspection and maintenance services to the European renewables market. With offices in the UK and Denmark, the Group now employs over 200 people, with £23m turnover in 2018.
Jon Dodge, the founder of JDC, has worked with 3sun’s founder, Graham Hacon, for over 20 years, having previously helped him grow and then successfully secure an exit from his previous company back in 2004.
During this long term relationship JDC has provided expert guidance to 3sun in a retained board advisory role, assisting with the numerous corporate advisory requirements of the company including acting as lead advisers on a number of successful acquisitions, most notably that of Dawson Energy Limited in 2010 and RRC Controls Services Limited in 2013.
In 2014, JDC secured £10m of minority investment from BGF to advance opportunities across Europe. In assisting 3sun to secure this investment, JDC liaised with several competing private equity houses, and acted as lead adviser through each stage of the investment from initial contact, through to valuation and negotiation to completion.
Five years later when it was time for BGF to exit this investment and 3sun to find a new partner to accelerate 3sun’s growth worldwide, JDC were returned to run and manage a global competitive trade sales process. Acting as lead adviser throughout the process, JDC secured a 100% share sale to Worley Limited (an Australian listed company with a market cap of c.AUD$7 billion) for an enterprise value of over £20m, providing a highly attractive exit for both BGF and the founder shareholders.
At JDC, our Private Equity services are designed to assist businesses which are seeking equity investment for either development capital to support their business plans, acquisition capital or a management buyout including de-risking shareholders. Our delivery of these services will be bespoke to the individuals and business requirements but will always contain clear and concise expert advice.
The JDC team has a wealth of experience in private equity transactions and has established relationships with private equity houses, which enable us to present the best fit investors for you and your business. If this is something you wish to explore to support you in your business journey, please contact us.