Corus investment arm agrees record equity-based deals in Wales worth £3.5m
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levels of equity investments in Wales to an all-time high.
UKSE, and its subsidiary UKSE Fund Managers (UKSEFM), agreed deals
worth £3.5m in Wales in 2005, outstripping the previous year by almost
20%.
The results have been underpinned a higher level of demand for
equity-based deals, which itself leads to larger deal sizes.
"Welsh companies are increasingly moving towards equity-based deals,
usually as part of a package with more traditional funding," said David
Hughes, UKSE's manager in Wales.
"Companies are thinking longer-term when they raise finance, and this
is a healthy sign. It shows that the Welsh economy is more in step with
competitor economies in other regions of the UK and Europe."
UKSE estimates the investments it made in 2005 will have directly
helped create about 750 jobs and leveraged £12m into the economy.
Another route for entrepreneurs looking to secure equity funding is
from Finance Wales Investments' European Union backed Objective One and
Objective Two funds.
"Funding from these sources is now accepted as the norm in Welsh
business, and overall it has played, and continues to play an important
role in developing the economy," said Mr Hughes.
Deal size in 2005 was up by 61%. The largest individual investment was
£350,000 via UKSEFM to Greenwood Services as part of a £1m package to
enable the recycling company to expand.
Indeed, environment-based companies formed a significant part of the
2005 portfolio, with investment also being made in television recycler
Wastechnique (£220,000 UKSEFM), as well as Action Waste (£200,000
UKSEFM) and Indigo Waste Solutions.
Other notable deals were Cardinal Packaging, which created 60 jobs in
Ebbw Vale on the back of a £250,000 investment by UKSE, as part of a
£5.8m deal, while TVonics, which manufactures TV set top digital
equipment, received an investment of £200,000 via UKSEFM, in a
£500,000 package.
"It has been an excellent year, and we are delighted with these
results. The economy remains generally buoyant, but is like the
curate's egg - better in some parts than others," said Mr Hughes.
While demand for Objective One investment is strong, Objective Two is a
relative newcomer to the Welsh business scene.
Mr Hughes said, "Covering southern Cardiff, Newport, the Vale of
Glamorgan and Mid Wales, this is potentially an important source of
investment capital for new and expanding businesses. UKSEFM is actively
looking for businesses in these areas with growth potential, which are
seeking finance."