Minister Bruton announces €75million second Development Capital Fund

3rd March 2014

BDO Development Capital Fund to focus on investing in Irish SMEs

The Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, today (Monday)  launched a €75 million fund under the Development Capital Scheme, to support established Irish companies targeting significant revenue and jobs growth  through export markets.  The development and roll out of the Scheme is a critical element in the Action Plan for Jobs.

Pictured L-R: Julie Sinnamon, CEO, Enterprise Ireland, Minister for Jobs, Enterprise and Innovation, Richard Bruton TD and Sinead Heaney, Founding Director of the BDO Development Capital Fund (Photo by Gary O' Neill)

Pictured L-R: Julie Sinnamon, CEO, Enterprise Ireland, Minister for Jobs, Enterprise and Innovation, Richard Bruton TD and Sinead Heaney, Founding Director of the BDO Development Capital Fund (Photo by Gary O' Neill).

The  BDO  Development  Capital  Fund,  which will be managed by Development Capital,  a  100%  subsidiary  of  BDO,  will invest development and growth capital  in established, mid-sized and profitable companies to support and accelerate  their  export  growth  plans.  It  breaks  new  ground  for  an enterprise  investment  fund which in addition to an experienced investment team  brings together a blue chip partnership of large Irish corporates and industry  experts  who,  together with Enterprise Ireland, will provide not only funding but also the necessary experience, expertise and international reach  to  assist  secure  business  growth  opportunities.  The corporate partners to the fund include Bank of Ireland, CRH plc, Glanbia plc and Glen Dimplex.

In  addition  to  the  corporate  partners the investee companies will have access  to  proven  industry  experts who have created, grown and developed Irish  companies  into  international  success  stories  comprising:  Denis Brosnan  (former  CEO  of Kerry Foods), Alan Crosbie (Former Chairman Irish Examiner  and  family  business  expert),  Dr. Noel Kelly (former Executive Director  of  Kentz),  Dr Jim Mountjoy (founder of Euristix) and Helen Ryan (former  CEO  Creganna  Tactx  Medical). The Development Capital Investment Directors are supported by an Investment Committee chaired by Eoin O’Driscoll (Chairman of SWS).

Target  companies  for  investment  will  be  Irish  and  have  significant opportunities  for  jobs  and  export  growth.  Typically companies will be mid-sized, with high-growth potential and annual turnover of €15million to €50million.  Based on the current growth opportunities it is likely that the majority of investments will come from the food and agri; life sciences and clean tech; ICT/software and industrial/engineering sectors.

Today’s announcement follows the announcement of the €125million first Development  Capital  Fund in November 2013. The Development Capital Scheme is  part  of  a  suite  of non-bank sources of finance rolled out under the Government’s  Action  Plan  for Jobs totalling more than €2billion in funds available for business.

Making the announcement today, Minister Bruton said:

“As  we  have  repeatedly  stated,  at  the  heart of our jobs plans is our determination to create a powerful engine of Irish enterprise alongside our strong  multinational  sector.  Around  the  country we have many excellent mid-sized  businesses in sectors like food, manufacturing and engineering – but  we want to support more of them to grow bigger, export more and employ more people.

“This  new  €75million  fund  from  BDO is a major addition to the supports available  to this hugely important sector. Not only will it invest sums of between €2million and €10million in 15 of these companies, but it will also provide  access  to mentoring and other expertise from people who have done it  before.  This  is  a very significant new support that will make a real difference  to businesses in this category, and will help more companies to grow more, export more, and ultimately create more of the jobs we need”.

Julie  Sinnamon, CEO, Enterprise Ireland, commented: “Funding is a critical component for Irish businesses to win business abroad and to create jobs. I would  like  congratulate  BDO  on  bringing  together such a unique set of investors  to  form the second fund under the Development Capital Scheme. I know  BDO and the advisory board they have formed to support their investee companies  will  bring  significant  added  value in helping their investee companies achieve their growth strategies”.

Sinead  Heaney,   Founding  Director  of  the BDO Development Capital Fund,

said:  “As  a  funding  partner,  Development Capital will provide not only funding  to  investee  companies  but  also  the  experience, expertise and international  reach  of  all  the partners in our Fund, namely experienced investment directors, leading Irish and international Corporates and proven industry experts.  We are confident that this unique approach will leverage the  strengths  and  expertise  of  all our partners delivering real market results in terms of increased export sales and job creation”.

Ms  Heaney  added:  “We  recognise  the  significant  growth  opportunities available  to  mid-sized  companies  and  will invest between €2million and €10million  in  approximately  15  investee  companies  and  our  team will actively  assist  them  accelerate  and  maximise  these opportunities. The investment  term  will be for a period of five years and we aim to have the fund  fully invested within three years. Where appropriate, we will also be open  to  the  possibility  of  leveraging further investment from suitable co-investment partners such as banks and private equity”.

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For further information, please contact:

Conor Quinn, Press Advisor to Minister Bruton, 087-3743783.
For BDO: Conor Dempsey, Dempsey Corporate, 0862479892, conor.dempsey@dempseycorporate.com
The Press Office at Enterprise Ireland

Notes for Editors

Development Capital Fund

The Development Capital Scheme was launched in 2012 by Minister Bruton as part of the Action Plan for Jobs in order to increase the availability of growth and expansion risk capital in the form of equity or quasi equity for established Irish manufacturing and high growth companies. The main objectives of the Scheme are to:

  • Increase the availability of risk capital to established Irish companies
  • To close the equity gap experienced by Irish SMEs
  • To encourage and leverage private sector investment in the Irish economy

Through an open and competitive process, Enterprise Ireland has made commitments of €75m available to three funds. Under the Scheme, commitments were made to funds that will provide equity, quasi equity or debt of between €2m and €10m to established investee companies. This is the second fund announced under the Scheme.



About the BDO Development Capital Fund & Development Capital Limited

The BDO Development Capital Fund is a €75 million Fund aimed at investing development and growth capital in established, mid-sized and profitable companies to support and accelerate their export growth plans. The fund is managed by Development Capital, a 100% subsidiary of BDO.

BDO is Ireland’s longest running BES/EIIS Fund Manager and in conjunction with its joint venture partner Davy, have successfully raised and managed

19 BES Funds and 3 EII Scheme Funds over the past 20 years.  This amounts to over €136 million.

Development Capital has created a unique and unprecedented smart funding model centred on a partnership approach that, in addition to substantial capital, will give the selected companies access to advice and international contacts from a range of large Irish corporate and senior business executives. The corporate partners to the fund include Bank of Ireland, CRH plc, Glanbia plc and Glen Dimplex. The fund will be invested, over a period of three years, in approximately 15 companies. Each investment will invest between €2million and €10million for an investment term of five years.

BDO Smart Funding Model and Advisory Board Led by Investment Directors Sinead Heaney and Andrew Bourg, the team at Development Capital have developed a unique Smart Funding Model for the BDO Development Capital Fund that combines capital with access to, both corporate and executive experience as well as international contacts. The fund capital sources include Enterprise Ireland, Bank of Ireland, CRH plc, Glanbia plc and Glen Dimplex.

This  unique  approach  combines  to  create  a  broad  and  deep  bank  of international  business experience for investee companies to draw upon.  In addition  to  the  Corporate  Partners  who have committed both funding and expertise  to assist investee companies, the investee companies have access to  proven  industry  experts  who  have created, grown and developed Irish Companies  into  international  success  stories  comprising: Denis Brosnan (former  CEO  of Kerry Foods), Alan Crosbie (Former Chairman Irish Examiner and  family  business expert), Dr. Noel Kelly (former Executive Director of Kentz),  Dr  Jim  Mountjoy (founder of Euristix) and Helen Ryan (former CEO Creganna  Tactx  Medical). The Development Capital Investment Directors are supported  by  an Investment Committee chaired by Eoin O’Driscoll (Chairman of SWS).

Partner Quotations

Bank of Ireland

Commenting Mark Cunningham, Director, Bank of Ireland Business Banking

said:  “Bank of Ireland is delighted to be supporting the BDO Development Capital Fund. The fund's particular combination of support from corporate Ireland and its strategic objective of facilitating the growth ambitions of indigenous, export-orientated SMEs across a broad range of sectors, has obvious appeal to Bank of Ireland.  As a bank, we are committed to the recovery and sustained growth of the SME sector (approving € 4 billion in new and increased lending in 2013). Our support for this fund is a further demonstration of the Bank's continued commitment to SMEs and our ambition to be  Ireland's Enterprise Bank.  We look forward to playing our role alongside BDO, Enterprise Ireland and our new corporate partners”.


CRH

Speaking on behalf of CRH, Dr Jack Golden, Organisation Development Director, said: “We believe this initiative will help to accelerate the growth of some very high quality small and medium sized businesses as they tackle global markets. Our experience over the last 40 years has shown that establishing a position abroad is as much dependent on developing networks as it is on accessing capital and we have always been very happy to help Irish companies entering the markets in which we operate.”


Glanbia

Siobhan  Talbot,  Glanbia  Group  Managing Director, said: “Glanbia is very happy  to support this BDO Development Capital Fund and to help indigenous, export-orientated  SMEs  achieve  balanced  growth  and  in  so doing drive exports  and  support  the  domestic  economy.    Across  the Group, we are involved  in a number of local and international projects that seek to make a  tangible  difference  in  local communities where we operate and we look forward to working with BDO, Enterprise Ireland and the other corporates on this initiative”.


Glen Dimplex

Glen Dimplex’s Seán O’Driscoll said: “Glen Dimplex, which started out as an indigenous  Irish business, has demonstrated through scaling how a business can  be  internationalised  from  an  Irish  base.  When the opportunity to support  the BDO Development Capital Fund was presented to us, Glen Dimplex immediately  committed  to  investing as a demonstration of its support for scaling  and  the  internationalisation  of  Irish  businesses  and  of its commitment to assisting Ireland’s economic recovery”.

Glen Dimplex was founded in 1973 and is the world's largest manufacturer of electrical  heating,  and also holds significant global market positions in domestic appliances, cooling, ventilation, and renewable energy solutions.

Today  Glen Dimplex is leading the way with the low carbon revolution, with an  unrivalled  range  of  solutions  in  space and water heating, cooling, ventilation and heat recovery. Across the world these innovative low carbon systems enable its customers to reduce CO2 emissions and eliminate cost.


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