BGF on the hunt for more 'exciting' firms in north and north-east

Investor BGF is keen to do more “exciting and interesting” deals in the north and north-east after completing its latest transaction in the region.

Paddy Graham, BGF’s head of Scotland and Northern Ireland, said the group was “busy on all fronts” last year.

New year started with £2m investment in Aberdeen tech firm

And this year has picked up where 2022 left off, with the investor recently completing a £2 million deal with Aberdeen-based business performance and technology specialist STC Insiso.

The cash injection has already resulted in the creation of three new product development jobs, and further recruitment is expected.

Mr Graham said BGF invested a total of £10.1m in north and north-east firms in 2022.

These are key businesses leading their markets and doing great things.”

Paddy Graham, BGF

Alongside funding partners Scottish Enterprise (SE) and the Scottish National Investment Bank (Snib), £8m was poured into Elasmogen – the Aberdeen life sciences company developing drugs derived from shark blood.

BGF also teamed up with SE and Equity Gap to pump £2m into high-flying Inverness firm Aiber, trading as Mime Technologies, which has developed a smart device for managing medical emergencies in the air.

Paddy Graham, BGF?s head of Scotland and Northern Ireland. Image BGF

And follow-on funding for Forres-based Orbex saw £40.5m sunk into the rocket-maker by multiple investors, including BGF.

The other funders were Snib, Heartcore Capital, High-Tech Grunderfonds, Octopus Ventures, Jacobs, Danish Green Future Fund, Verve Ventures, and entrepreneurs Phillip and James Chambers.

We continue to do as much as we can in the area, making sure our investments are creating large businesses of value and making an impact in the region.”

Mr Graham said: “It was a good year for us in the north and north-east.

“We invested in some very exciting and interesting businesses, with cutting-edge technology. We’re hoping there will be more in 2023.

“Orbex (which is counting down to the first vertical launch from UK soil, from Space Hub Sutherland) is really good for the region.

“It’s been fairly high profile and our investment there will drive ancillary businesses and skills. It’s good to be part of that.”

Orbex is aiming for blast-off this year. Image: Jason Hedges /DC Thomson

Catering services firm Entier – which BGF backed in 2017 “had a strong recovery last year, with expectations for growth in 2023”, Mr Graham said.

BGF invested £6.5m in Entier, with the figure including £2million of new debt funding.

The remaining £4.5m was used to buy shares in the Westhill, Aberdeenshire business.

Keenan’s bumps and troughs

Another BGF investment, Keenan Recycling, of Aberdeen, has “done a fantastic job of navigating bumps and troughs over the past couple of years, BGF’s Scottish boss said.

Fellow Granite City firm Well-Sense – one of the BGF-backed FrontRow Energy Technology Group of companies – is picking up more business all the time, he added.

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BGF reported a “highly successful” exit from Aberdeen-based cloud technology firm Inoapps last year and Mr Graham said there was likely to be another disposal in 2023.

He added: “We continue to do as much as we can in the area, making sure our investments are creating large businesses of value and making an impact in the region.

“These are key businesses leading their markets and doing great things.”

£2m was pumped into Inverness medtech firm Aiber. l-r Alasdair Mort, chief operating officer, Aiber; Anne Roberts, co-founder and chief executive, Aiber; and Keith Barclay, BGF. Image BGF

Backed by some of the UK’s largest banks, BGF – formerly the Business Growth Fund – invests in small and mid-sized businesses in the UK and Ireland.

Its Scotland and Northern Ireland team reported another strong year in 2022, delivering “a series of highly successful exits” and investing £42m in the economy.

The team has invested £150m in more than 60 companies over the past three years.

A few of Entier’s dine at home dishes. Image: Entier

Mr Graham said: “Scottish deal flow continued at good pace in 2022 on the back of a record 2021.

“It has been particularly pleasing to see investments such as Orbex placing Scotland in the centre of new and growing sectors, as well as attracting co-investors from home and abroad.

Aberdeen-based Keenan Recycling is one of BGF’s investees.

“Our exit activity ranged from sales to trade buyers and private equity through to management buy-outs.

“The breadth of these deals highlights BGF’s proactive yet flexible approach, where we work with management teams to get the right outcome for all stakeholders.

“It also evidences a consistent track record of strong outcomes in Scotland over multiple years, which is testament to the quality of the portfolio and how it has grown and developed.”

Total of £3bn invested in UK and Irish firms to date

BGF’s Scottish portfolio now ranges from companies specialising in precision manufacturing, to healthcare and technology, through to luxury handbags and a market-leading petfood brand.

Since its inception in 2011, the investor has provided £3 billion to more than 500 companies throughout the UK and Ireland. In 2022 BGF’s teams delivered 45 new investments worth a total of £443m.