MSIF Pulls off Simultaneous Exit and Investment in £16m Deal
27th May 2008
Merseyside Special Investment Fund’s (MSIF) Venture Fund has invested £3m as part of a funding package to refinance Liverpool-based nutritional products company, Vitaflo.
The deal which includes a comprehensive funding package from Clydesdale Bank Plc – the sister bank of Yorkshire Bank, and directors’ own investment will allow for the exit of non management shareholders including shares held by MSIF’s first Venture and Mezzanine Funds following an initial investment of half a million pounds in 1998.
The deal will provide MSIF with both its most significant exit to date and also with its largest single investment. Venture Fund portfolio director, Jerry Mobbs - who made the original investment, and investment manager, Jon Wormald, led the deal for MSIF.
Vitaflo has developed, and sells worldwide, an innovative range of nutritional products to manage metabolic diseases and disease-related malnutrition. It is one of the global market leaders in its industry and sells products to patients via the NHS and wholesalers in the UK, and through distributors overseas.
The company was formed in 1997 by the acquisition of a small Scottish company, which was relocated to its current site at Brunswick Dock in 1998. The business is run by directors Tony Partington, Bill MacNab and Maura O’Donnell and employs 41 staff. From a turnover of £200,000 in 1998, Vitaflo has grown to its current £11 million turnover and continued growth in turnover, profits and staff is forecast.
Jerry Mobbs said: “We recognised the quality in Vitaflo right from the start and its progress has been a huge success story for the company and MSIF. The exit will yield £6.6m for MSIF and a total return in excess of 20 times our initial Venture Fund investment.
“The latest £3m investment is supporting a business and a team we know very well. Vitaflo’s growth has been exceptional and we expect this to continue. The management team is being further strengthened through the appointment Of Ken McLachlan, an experienced senior executive who has had a leading role in a number of multinational health-related businesses. We are really pleased to continue our involvement with this company.”
Mark Fuller, managing director of MSIF’s Fund Manager said: “I’m absolutely delighted with this transaction. Our ability to foster and nurture great opportunities has been demonstrated and, very importantly, to ultimately realise value for our investors and our long term business.”
Paul Argent, specialist and acquisition finance director with Clydesdale Bank plc added: “This funding will allow the management team to pursue their plans for the future. Vitaflo has been a terrific success story and with ongoing advances in the field of biochemistry, there is major potential for growth."
Vitaflo director, Tony Partington said: “Vitaflo is a great success story for Merseyside. We would like to express our appreciation to MSIF for all the support they have given us, particularly during the early years when they stood by us through some tough times. We are pleased that our relationship with MSIF will carry on through this latest investment and are very much looking forward to the future.”
Legal advisors involved in the transaction were Paul Rimmer, James Kerrigan and Andrew Noon at DLA who acted for MSIF and Kieran Donovan at DWF who acted for the management. Financial due diligence was undertaken by KPMG.
Ends
For further information contact:
MSIF: Angela White - MSIF on 0151 236 4040.
Clydesdale Yorkshire Bank: Samantha Dabbs - Clydesdale Yorkshire Bank on 07711 672893
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