IP Group plans to raise £55 million

This will raise gross proceeds of £55 million (approximately £53.3 million net of expenses).  The Group, which commercialises intellectual property originating from research intensive institutions and has partnerships with ten UK universities, says it is raising the funds in order to:

  • increase its overall rate of investment into its portfolio;
  • enable it to maintain or increase its stakes through subsequent financing rounds in those post-seed investment opportunities (typically businesses which have received some level of further funding from co-investors external to the Group) which its directors consider to be the most promising;
  • provide it with greater flexibility to lead subsequent investment rounds in existing and future post-seed companies, decreasing its reliance on external capital and allowing it to maintain significant minority equity stakes with a view to increasing returns; and
  • continue to expand its access to, and provide capital to enable the development of, technology originating from its partner universities or other research intensive institutions (including, where appropriate, through the establishment of new partnerships or other collaborative relationships with such institutions).

Alan Aubrey, chief executive of IP Group, said "A number of the Group’s portfolio businesses have made excellent recent progress towards achieving key commercial milestones.  This proposed equity raise will enable the Group to maintain or increase stakes in these post-seed opportunities whilst also increasing its overall rate of investment.  Strengthening the balance sheet in this way provides the Group with greater flexibility to lead investment rounds whilst decreasing its reliance on external capital, thereby ensuring that we are able to maintain significant minority stakes in the most promising opportunities.  We remain confident that our strategy will generate significant long-term returns for shareholders.”

At the same time that it announced the placing, IP Group announced the appointment of Greg Smith to its board as Chief Financial Officer with immediate effect.  Smith has over ten years of experience as a finance professional and has held the role of Group Financial Controller since joining the Group in January 2008.  He joined IP Group from Tarchon Capital Management, a London-based fund of hedge funds manager, where he had day to day responsibility for building and managing the operations and accounting team as well as external operational due diligence on investee hedge funds. Prior to Tarchon, he spent four years in KPMG’s London financial services practice working with asset management, insurance and banking clients.  He is a Chartered Accountant and holds a degree in Mathematics from the University of Warwick.

Posted on Tuesday, 21 June 2011