Scottish Loan Fund supports Merson Signs
£3m deal will support company growth
Maven Capital Partners (Maven) is delighted to announce support for Merson Signs Limited (Merson), through the provision of funding backed by the Scottish Loan Fund (SLF).
Merson will benefit from an initial £900k of funding with a further commitment enabling them to drawdown up to £3 million in total from the SLF which is managed by Maven.
Founded in 1938, Merson is one of the UK’s leading commercial signage manufacturers, providing a one-stop shop for its blue chip client base. The company has been involved in a number of high profile projects including Heathrow Terminal 5 and the 2012 London Olympics, providing services like initial design, sign manufacture, installation and project management followed by ongoing maintenance.
Headquartered in East Kilbride, Merson has delivered impressive growth in recent years and currently employs 150 staff across the company. Funding from the SLF, £250,000 of Regional Selective Assistance from Scottish Enterprise and assistance from Merson’s banking partner HSBC, which provided working capital of £1 million and an international bond facility, has been used to acquire the assets of CGL Systems Ltd (CGL), which will provide additional manufacturing capacity, enabling Merson to meet growing demand from its existing client base while supporting international expansion from its established base in the Middle East.
The addition of CGL to the Group will also help Merson diversify its operations and complement its existing signage divisions – Merson Signs, Merson Sign Design and Merson i-level Retail. Maven investment director David Milroy, who led the deal, commented: “We are delighted to have supported Merson. We have been particularly impressed with the quality and strength of the management team who have a great track record and impressive client base and with whom the company has forged long standing relationships.
"We were particularly impressed with the company’s recent success and with its growth prospects in the Middle East, where they have established a presence in recent years.”
Roddy Angus, Managing Director at Merson, added: “It is great to have secured a funding package that will provide the flexibility to enable the company to pursue its growth ambitions and take advantage of opportunities as they arise in the market.
"We are delighted that Maven was able to support Merson and we look forward to being able to call on the experience they are able to offer, particularly given their track record in helping SME’s to grow.”
Enterprise Minister Fergus Ewing, who visited the company on Thursday 17 January, said, "Scotland is the most competitive place in the UK to do business and The Scottish Government is working with our enterprise agencies to retain that position.
"Securing affordable finance remains a challenge for some firms and we are addressing this by providing the environment that will allow our small and medium sized businesses to unlock new investment. The Loan Fund is an excellent example of this and I'm encouraged to see that Merson Signs are benefiting from accessing this funding.
"We will continue to support these innovative, high growth companies as part of our drive to build sustainable economic growth for Scotland.”
Kerry Sharp, acting head of the Scottish Investment Bank, a division of Scottish Enterprise commented, “2012 was an excellent year for the Scottish Loan Fund, and it’s great to start 2013 with a new investment in a growing and ambitious Scottish company.
"Merson Signs is exactly the kind of company we want to support - an established SME with sustainable operating profits and positive cash generation, operating in a growth market. This investment will help the business to expand, bringing outsourced work back in house and protect the 140 jobs in its three East Kilbride factories and offices in Aylesbury and London. We'll continue to work with Merson to help the company reach its full potential over time."
About the Scottish Loan Fund:
The Scottish Loan Fund was established by the Scottish Investment Bank to address the market need for finance for SMEs, using £55 million cornerstone funding from Scottish Enterprise (including contributions from the European Regional Development Fund and Highlands and Islands Enterprise). Further investment from the private sector, including Lloyds Banking Group, RBS, Clydesdale Bank, Santander, Strathclyde Pension Fund and Aberdeen City Council Pension Fund took the final total £113 million. SLF focuses on providing mezzanine loans to growth and export businesses with an annual turnover of more than £1 million. Maven Capital Partners was selected as the fund manager in February 2011.
About Maven Capital Partners UK LLP:
Maven Capital Partners UK LLP (Maven) is a small-to-mid cap private equity house focused on the provision of growth capital and mezzanine finance to SMEs across the UK. It is one of the most active private equity fund managers in the country, managing around £280 million of assets for a variety of client funds, including Venture Capital Trusts, the SLF, Capital for Enterprise Fund A, and a number of family offices and high net worth individuals. Headquartered in Glasgow, and with five other offices throughout the UK, Maven has nationwide coverage of the market for SME finance and is able to source a variety of deals through 16 regionally based investment executives. With over 35 staff and partners, including three consultants, Maven executes a range of private company transactions, offers hands-on proactive portfolio management to investee companies and provides a fully integrated back-office support function to client and third party fund managers. The Maven team has completed over 30 private company deals since June 2009, including 17 mezzanine and equity deals on behalf of the UK Government backed Capital for Enterprise Fund A, which was an initiative to help SMEs gain access to the financial support required to bridge the funding gap caused by the credit crisis. www.mavencp.com
About the Scottish Investment Bank:
The Scottish Investment Bank is a division of Scottish Enterprise operating Scotland-wide in partnership with Highlands and Islands Enterprise. It manages a suite of funds including the Scottish Seed Fund; the Scottish Co-investment Fund; the Scottish Venture Fund; the Scottish Plastics Loan Fund and the Renewable Energy Investment Fund. SIB is also the cornerstone investor in the privately-managed Scottish Loan Fund. These support Scotland’s SME funding market to ensure businesses with growth and export potential have adequate access to capital. SIB also provides a team of financial readiness specialists to help companies prepare for new investment and more easily access finance from the private sector. www.scottish-enterprise.com/sib
About Regional Selective Assistance:
Regional Selective Assistance (RSA) is the main national scheme of financial assistance to industry from Scottish Enterprise. It provides discretionary grants to investment projects that will create and safeguard employment in areas designated for regional aid under European Community law. Payment of RSA is made in instalments, typically over several years as job and capital expenditure targets are met. Not all projects will proceed, and nor do all accepted offers result in full payment, as projects are sometimes scaled down or abandoned before payments are made. The figures quoted represent the maximum grant potentially payable if the project is satisfactorily completed, and not the amount actually paid to date. All job numbers are firms’ forecast figures, and are subject to change depending on future economic conditions and other factors affecting the businesses concerned. www.scottish-enterprise.com/rsa
If you would like more information about Maven or this investment, please contact:
David Milroy at david.milroy@mavencp.com / 0131 306 2201 OR Steve Marshall at steve.marshall@mavencp.com / 0141 306 7585