Intechnica Holdings – the Manchester-based company which is a leading provider of specialised IT and technology consulting services for private equity firms – has been sold to US-based Crosslake Technologies in a £14.5m deal.

The sale provides an exit for Mercia Asset Management, which held a majority stake in the business via its own direct funds and three of its managed funds, and founders Jeremy Gidlow and Andy Still. Mercia first invested in Intechnica in December 2013 and has proactively supported the business since then, building out the board and then initiating the spin-out of its cyber security arm Netacea as a standalone company in 2022.

Mercia will receive cash proceeds of £3.7m from its 25.5% direct holding in Intechnica, representing a 1.7x return on investment.  It also achieved a 2.6x return for its three managed funds, which between them held 27.9% of Intechnica. They were NPIF – Mercia Equity Finance, which is part of the Northern Powerhouse Investment Fund (NPIF), the Northern VCTs and the North West Fund for Venture Capital.

Mercia has retained its stake in Netacea and Will Clark, Mercia’s Managing Director of Regional Venture, who was Board director of Intechnica at exit, will remain on Netacea’s board.

Crosslake is a leader in data-driven technology advisory services for private equity firms and their portfolio companies.

Intechnica’s founder, Jeremy Gidlow, said: 

“Together, the combined teams of Crosslake and Intechnica will become a leader in Europe, building on each other’s strengths and accelerating value creation for our clients. Crosslake’s experience, data and expertise – especially in the areas of cybersecurity, engineering and enterprise systems – complements our current offerings and allows us to more fully create impact for our clients. At the same time, we’re also able to leverage Crosslake’s global reach to expand the impact of our bespoke digital lab and data science services.”

Dr Mark Payton, CEO of Mercia Asset Management PLC, said:

“Intechnica is a great Manchester-based business that, as with all our direct investments, has been supported by Mercia’s regionally managed funds throughout the investment journey. This full-cash exit delivers an excellent result for Mercia and allows Intechnica’s founders to focus on the continued growth of Netacea, an increasingly respected global brand in the cyber threat detection market.

“This is another direct investment exit above holding value, which continues to support our valuation methodologies.”

Ken Cooper, Managing Director of Venture Solutions at the British Business Bank, said: 

“The success of NPIF-backed businesses like Intechnica demonstrates the impact that regionally focused equity investment can have in facilitating growth and expansion of local companies.  Funding can be used to create new jobs and opportunities, helping innovative and fast growth businesses across the North of England realise their potential.”

Duncan Wilson and Rebecca Mackellar from Addleshaw Goddard, together with Patrick Ford from Squire Paton Boggs, provided legal advice to Intechnica shareholders on the sale.

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank. 

ENDS

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About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional SMEs to achieve their growth aspirations. Mercia provides capital across its four asset classes of balance sheet, venture, private equity and debt capital: the Group’s ‘Complete Connected Capital’. The Group initially nurtures businesses via its third-party funds under management, then over time Mercia can provide further funding to the most promising companies, by deploying direct investment follow-on capital from its own balance sheet.

The Group has a strong UK footprint through its regional offices, 19 university partnerships and extensive personal networks, providing it with access to high-quality deal flow. Mercia currently has c.£1.4 billion of assets under management and, since its IPO in December 2014, has invested c.£111million gross into its direct investment portfolio.

The Group raises its own Enterprise Investment Scheme (EIS) Funds and manages Venture Capital Trusts (VCTs) details about open offers can be found through Mercia’s website.

Mercia Asset Management PLC is quoted on AIM with the epic “MERC” and includes the following wholly owned subsidiaries –

• Mercia Fund Management Limited is authorised and regulated by the FCA under firm reference number 524856
• Enterprise Ventures Limited is authorised and regulated by the FCA under firm reference number 183363
• EV Business Loans Limited is authorised and regulated by the FCA under firm reference number 443560

www.mercia.co.uk

About The Northern Powerhouse Investment Fund

• The Northern Powerhouse Investment Fund will invest in Microfinance, Business Loans and Equity Finance sub-funds which will offer financing ranging from £25,000 to £2m, specifically to help small and medium sized businesses secure the funding they need for growth and development.
• The Northern Powerhouse Investment Fund is operated by British Business Financial Services Limited, wholly owned by British Business Bank, the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity.
• The Northern Powerhouse Investment Fund is supported by the European Regional Development Fund, the European Investment Bank, the Department for Business, Energy and Industrial Strategy and British Business Finance Limited, a British Business Bank group company.
• The NPIF covers the following LEP areas: Tees Valley Combined Authority, Greater Manchester, Cheshire and Warrington, Cumbria, Liverpool City Region, Lancashire, Hull and East Yorkshire, Leeds City Region, Sheffield City Region, and York & North Yorkshire
• The project is receiving up to £140,359,192 of funding from the England European Regional Development Fund as part of the European Structural and Investment Funds Growth Programme 2014-2020. The Department for Communities and Local Government is the Managing Authority for European Regional Development Fund. Established by the European Union, the European Regional Development Fund helps local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations. For more information visit https://www.gov.uk/european-growth-funding.
• The funds in which Northern Powerhouse Investment Fund invests are open to businesses with material operations, or planning to open material operations, in, Yorkshire and the Humber, the North West and Tees Valley.
• The British Business Bank has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). The guide, which impartially sets out the range finance options available to businesses and provides links to support available at a regional level, is available at www.thebusinessfinanceguide.co.uk/bbb