Mercia Technologies PLC Sale of Allinea Software Limited to ARM (0500S)
December 16 2016 - 1:00AM
UK Regulatory
TIDMMERC
RNS Number : 0500S
Mercia Technologies PLC
16 December 2016
RNS 16 December 2016
Mercia Technologies PLC
("Mercia", "the Company" or "the Group")
Sale of Allinea Software Limited to ARM Limited
Mercia Technologies PLC (AIM: MERC), a national investment group
focused on the creation, funding and scaling of innovative
technology businesses with high growth potential from the UK
regions, is pleased to announce the sale of Allinea Software
Limited ("Allinea") to ARM Limited ("ARM"), the world's leading
semiconductor IP company, for a total cash consideration of up to
GBP18.1million. The sale represents a return of circa 21x on the
original investment cost.
Allinea, based in Warwick, is a leading provider of software
tools for developing and optimising high performance computing
applications. This cash exit demonstrates how early-stage
businesses can be effectively supported through Mercia's 'Complete
Capital Solution'. In 2009, Mercia identified the investment
opportunity and led the funding of a management buyout of Allinea
from another University of Warwick spinout. Mercia's third party
managed funds provided early-stage investment and support.
Following a period of successful trading, Allinea then became one
of the Group's original direct investments ('Emerging Stars') at
the time of Mercia's IPO in December 2014. Mercia's direct holding
increased from 6.9% at IPO, to 16.6% as at 30 September 2016 via
its purchase of the Mercia Fund 2 investment portfolio in 2015.
Allinea's platform is able to address high performance computing
software development, debugging and performance optimisation
through the use of its core products. Allinea has offices in the
United States, Europe and Japan, and its software is used in circa
70% of the world's largest supercomputers. It has built
relationships with many notable, blue-chip customers and
partners.
With backing from Mercia, Allinea was scaled into a profitable,
cash generative and dividend paying business over a period of seven
years and Allinea's board has now successfully completed a
competitive sale process.
This first Emerging Star divestment represents a substantial
return for Mercia, which will receive initial proceeds of
GBP2.6million (net of transaction expenses) with a further
GBP0.3million held in escrow for up to 18 months in respect of
customary closing working capital calculations and potential
warranty claims. Mercia will recognise an immediate realised gain
of GBP0.7million, compared with the holding value of GBP1.9million
as at 30 September 2016. Mercia's total investment cost is
GBP1.5million, so the initial proceeds of GBP2.6million represents
a 73% uplift.
Dr Mark Payton, CEO of Mercia Technologies PLC, said:
"This planned divestment is a pleasing endorsement of Mercia's
Complete Capital Solution, showing how Mercia sources and invests
in attractive investment opportunities at an early stage. Initially
this is undertaken via the managed funds, subsequently scaling
those assets through direct investment which have the potential,
ultimately, to be acquired by top-tier buyers. The sale of Allinea
to ARM is a testament to the value held within our investment
portfolio and will enable Allinea to accelerate its development and
reach within the growing high performance computing markets, as
well as achieving greater exposure in adjacent segments such as
machine learning. As a Midlands-based business, this is further
evidence of the hidden value we are able to unearth from the UK
regions and our university partnerships."
For further information, please contact:
Mercia Technologies PLC
Mark Payton, Chief Executive Officer
Martin Glanfield, Chief Financial Officer
www.merciatech.co.uk +44 (0)330 223 1430
Cenkos Securities plc
Ivonne Cantu / Mark Connelly (NOMAD) +44 (0)20 7397 8900
Buchanan
Sophie McNulty, Victoria Hayns, Stephanie Watson
www.buchanan.uk.com +44 (0)20 7466 5000
About Mercia Technologies PLC
Mercia is a national investment group focused on the creation,
funding and scaling of innovative businesses with high growth
potential from the UK regions. Mercia benefits from 18 university
partnerships and six offices across the Midlands, the North of
England and Scotland providing it with access to high quality,
regional deal flow. Mercia Technologies PLC is quoted on AIM with
the epic "MERC".
Mercia's 'Complete Capital Solution' initially nurtures
businesses via its third party funds (with more than
GBP228.0million under management) and then over time Mercia can
provide further funding to its 'Emerging Stars' by deploying direct
investment follow-on capital from its own balance sheet.
Since its IPO in December 2014, the Company has invested over
GBP30.0million directly across its portfolio of 'Emerging
Stars'.
About Allinea
Allinea creates powerful development and performance analysis
tools that enable developers and users of software in high
performance computing to create and deploy applications that
achieve the most efficient use of their systems.
The company's software is now used in 70% of the world's largest
supercomputers. Its customers are the leaders in government
supercomputing, such as the US Department of Energy, NOAA, NASA and
CEA as well as major Fortune 500 companies including Shell,
Emerson, Oracle and Corning, and research groups and educators at
universities such as Princeton, Stanford, Cambridge and
Edinburgh.
This information is provided by RNS
The company news service from the London Stock Exchange
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