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iDeals update

Over the last 6 months we’ve seen very active deal flow, with those levels of activity continuing through March and April, with most well advanced equity investments being driven to completion despite the challenges of Covid-19.

Some joint ventures and business acquisitions appear to have suffered a more immediate suspension, where there is a greater ability to adopt a wait and see approach but over the last 6 months the more notable deals include:

Investment

  • Green Energy Company – US and UK equity investment and debt of £20m
  • Current Health Limited – equity investment of£9m from Legal & General, MMC Ventures and Par Equity
  • SHE Software Group Limited – £5m equity investment by Frog Capital and NVM
  • Acting for a leading travel-tech business in respect of £5m equity investment from existing and new investors
  • Acting for SIS Ventures as part of a Series A funding round into a life science company
  • Novosound Ltd -  equity funding of £3.3m from Foresight, FW EIS Fund, Par, Kelvin, Gabriel and SIB
  • Cyan Forensics Ltd - equity funding of £1.3m from Triple Point, Mercia, SISV and SIB
  • Float Yard Ltd – equity funding of £1.5m from Marchmont Ventures and Manchester Venture Partners
  • Archangel Investors – equity co-investments of £1.5m, £0.5m and £3.4m into Blackford Analysis, MGB Biopharma and Administrate
  • SISV Ventures – equity investor as part of £1.2m equity investment in Good Loop
  • Jiva Materials Limited – equity investment of c.£760k by Sky Ocean Ventures, Venrex, Sorbon and Armstrong Capital
  • PD Neurotechnology - investment of € 1.5m from Big Pi Partners
  • Gravitricity Limited – fundraise of £800k on Crowdcube
  • Saietta Group Ltd - £1.2m rights issue for an electric motoring business
  • Turtle Tree Technology Holdings Ltd - £1.1m investment in blockchain business solutions business
  • Feedstock - £2.2m investment in AI technology business
  • Blackbetty - £475K investment via loan notes in BB Group Holdings Limited
  • Stampede AI – equity funding of £500k from Techstart Ventures, Galvanise Capital, private investors and Scottish Enterprise
  • Chilean investment fund - $4,000,000 investment into UK thermal energy storage business
  • Cloud computing company – equity investment and debt of £1m;
  • Wellbeing Company – equity investment of c£900k
  • Food Production Company - debt funding of £2.5m
  • Tidal energy business refinancing and equity investment of £1.25m
  • Online Finance Comparison Company -  equity funding of £800k
  • Blockchain Services Company – equity and debt funding of £1million
  • Precision scientific lasers manufacturer - equity investment of £800k
  • VC Fund – £1.75m investment in drone management platform and airspace integration business;
  • Adaptive web-based learning technology business, circa £1m equity investment
  • Acting for progressive online booking software company, circa £1.1m equity investment across two tranches Feb and March 2020;

Restructuring

  • Asterope Ltd – restructuring for investment of €9m into industrial robotics subsidiary TAU Act GmbH
  • Amaro Signalling Ltd and Andromeda Engineering Ltd – restructuring and £750K investment in railway signalling and engineering businesses
  • JR Prop Ltd – advising administrators on administration of camera retailer Jessops

M&A deals

  • Intuitus Ltd – acquisition by Endava Plc
  • Chilli Connect Limited - acquisition by Unity Technologies
  • A2E Limited - acquisition by US buyer
  • Qikserve Limited – acquisition of Preoday Limited
  • £2m management buy-out of plant machinery business Woodmace Limited and Woodmace Plant Limited
  • Great British Chefs – asset sale out of administration
  • Atlas City Global – asset purchase out of administration by Turtle Tree Technology Ltd
  • The sale of class-leading developer and producer of home-use diagnostic devices to an international bio-tech group

Undoubtedly equity investment deal flow will follow the same path as M&A activity, with investors and high growth companies recalibrating their cash runways and craving the most up-to-date information on Government initiatives like the Future Fund (https://www.gov.uk/guidance/future-fund), in order to inform their decisions. We have seen a number of investors revalue their proposed investments on the back of the recent stock market losses and many companies are having to be creative in how their deals are being structured to encourage their investors to follow on and do so quickly. As with the last recession convertible loan deals are making a comeback – please click here for more details on the pros and cons of using these instruments as a means of further funding.

Against this backdrop necessity has been the mother of invention (or at least adoption), with even the most cautious advisers and institutions adopting electronic signatures in order to achieve “lock-down completions” and with a focus on enhanced IT capabilities proving shrewder than a trolley full of loo roll. We have completed a lot of transactions over recent weeks using electronic signatures and have set up a Digital Deals Hub which we would encourage you to visit. Getting deals completed during lock-down is logistically a lot harder so spending more time on project management will be important and something not to lose sight of – please click here for more details on deal planning.

Looking forward, even with the greatest of optimism, there can be no doubt that it will be some time before deal volumes and valuations get back to something approaching pre-Covid-19 levels. EIS rounds are already contracting in size and whilst active VCs remain open for business, with a need to deploy funds, they will inevitably be focussing on the needs of their existing portfolios.

Anecdotal indications of clients finding themselves in the right place at the right time will be of cold comfort to those facing some of the most difficult decisions and we can only hope that the unprecedented Government initiatives help protect as many good businesses as possible.

If you would like help on a deal or would like to discuss how you might structure one for you, then please feel free to get in touch with any of our corporate partners (Kenny Mumford, Michael Arnott, Tracey Ginn, Bryan Shaw and Stuart Hendry) or your usual contact within the firm.

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