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Deals Update

In April M-Squared Lasers Limited was one of the first Scottish companies to receive investment from BGF (Business Growth Fund).  

MBM Commercial were delighted to help M Squared complete this milestone event, which saw £3.85m being invested by BGF to accelerate its international trade. While BGF's investment will boost the company's development of high performance lasers and detection technology for oil and gas, defense and medical industries, it also highlights the increasing deployment of growth capital from new funding sources. BGF emanated from an initiative by a number of the UK's largest banks, and was set up specifically to provide support to growing businesses and help to foster the UK's economic recovery.  The fact that it is now able to provide essential growth capital to first class growing companies should be an encouraging sign to all. While there is certainly no "soft money" in the market, companies that can present a compelling case for investment are not without a varied range of equity funders, in addition to the established business angel community and the range of early stage equity  funds.  BGF is not the only investor to have been created to help encourage economic recovery.  The Scottish Loan Fund managed by Maven Capital Partners can be seen to have the same underlying ethos, meaningful amounts invested on fully commercial terms, but with an underlying strategy of economic growth.


Another interesting entrant to the market is the £50m Business Angel Co Investment Fund (Angel CoFund) which was launched in November 2011.  This follows a similar model to the Scottish Co-investment Fund which has successfully operated in operated in Scotland for a number of years. The model of public or institutional backing for national funding initiatives is not new and can be traced back to the post war years. While such funds may not be able to be all things to all early stage companies, they serve as an invaluable source of growth capital to companies like M Squared, where dynamic management teams combine with cutting edge technologies to create genuine economic growth.

Kenny Mumford
Partner
Corporate

Email: kenny.mumford@mbmcommercial.co.uk
Call: 0131 226 8205

ALBAGAIA RAISES £0.5M FOR COMMERCIALISATION AND SALES DRIVE

MBM Commercial are delighted to have assisted Albagaia Ltd with its recent equity investment as part of an overall funding package of £0.5m. It received inward investment of £240,000, half from the Equity Gap angel group and half from Scottish Enterprise's (SE) Scottish Investment Bank.    This equity funding lets the company proceed with research grants worth more than £250,000 from Zero Waste Scotland and Scottish Enterprise’s SMART:Scotland.  This funding package will allow Algabaia to further develop its pioneering waste recovery technology and launch an international sales campaign for its record-breaking bacteria test kits.

What do Albagaia do?

Linlithgow-based Albagaia is developing cutting-edge waste water treatment systems using photocatalytic oxidation.  Its pioneering technology was originally developed to destroy the deadly agents in chemical weapons and later adapted to recover contaminated material and generate clean water.  The company’s Hydrosense subsidiary makes the world's fastest test for the killer Legionella bacteria which cause Legionnaires' disease and innovative smartphone software that reads these and other test results. The test detects the dangerous bug in just 25 minutes at the site of a potential problem compared with up to two weeks in a traditional lab.

More about the deal

Graham Tyrie, CEO of Albagaia, commenting on the deal, said:

“This demonstration of faith in Albagaia's future prospects allows us to fund both water treatment and our innovative smartphone reader software which reads test results independently and transmits them to a central database.  We are developing the reader for our Legionella service and have plans to extend to other point of care tests.  Scottish Enterprise support has been instrumental in helping us get to this exciting milestone. These recent developments are based on our success in securing a SMART feasibility grant which matched our directors’ investment since 2010. The advice and guidance of Stuart Hendry and the team at MBM Commercial was instrumental in bringing this funding deal to fruition. Further significant corporate developments are under way as Albagaia positions itself as a key player in the international water treatment and testing markets.”

Jock Millican, director of Equity Gap, commenting on the deal, said:

“Albagaia is an excellent investment with the three strands of the business at different stages of development. Hydrosense is producing revenue but needs some sales impetus, the smartphone reader is almost ready for sales and the photocatalytic oxidation technology has been proven at small scale.  The investment will be used to scale up the advanced oxidation technology and sales staff for the Hydrosense test kit. The management team is strong and the projections are realistic.”

Campbell Murray of the High Growth Start-up Unit at Scottish Enterprise said:

“We have worked intensively with the management team to help the company get to this point – with this fresh injection of funding from Equity Gap and the Scottish Investment Bank, Albagaia will be able to further develop its technology and sales strategy and ultimately achieve significant growth.”

Also commenting on the deal Stuart Hendry, partner in MBM Commercial LLP, said:

“We are delighted to have assisted Albagaia with its recent fundraising round. This is a key milestone for the company as part of its planned strategy of growth and the investment will allow it to complete a number of other significant corporate events which it has been planning.  We look forward to working with the company going forward.”

For more details about Albagaia please visit www.albagaia.com and www.hydrosense.biz.  

For more details about Equity Gap please visit www.equitygap.co.uk.

For more details about the Scottish Investment Bank please visit www.scottish-enterprise.com/sib.

Stuart Hendry
Partner
Corporate & Intellectual Property

Email: stuart.hendry@mbmcommercial.co.uk
Call: 0131 226 8203

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