BDO Development Capital Fund Invests €9M in Netwatch Group as Part of €19.5M Funding Round

6th July 2016

BDO

David Walsh - CEO, Netwatch and Andrew Bourg - Investment Director, Development Capital

Funds to be used to drive international growth as Netwatch targets new customer acquisition in the US & UK

The BDO Development Capital Fund is co-funding a €19.5million investment in Netwatch Group, Ireland’s leading high tech security specialists.

It is the largest funding round in Netwatch to date. The BDO Development Capital Fund is providing €9 million, the largest of its five investments so far, with Bank of Ireland providing €10.5million debt financing.

Netwatch was incorporated in Carlow in 2003 by co-founders and joint owners of the Company, David Walsh (CEO) and Niall Kelly (CTO). 

The funds will be used to support Netwatch’s international growth strategy.  New customer acquisition in the US and the UK markets is a key aspect of the investment.  As part of the Investment Sinead Heaney, Investment Director of Development Capital has joined the Netwatch Board. The project is also supported by the Department of Jobs, Enterprise and Innovation through Enterprise Ireland’s investment in the BDO Development Capital Fund.

Netwatch deploys the most advanced video processing technologies to proactively monitor and protect their clients’ assets. This involves installing high quality security cameras coupled with its intelligent software to detect suspicious events at its customer’s sites.  Intervention Specialists direct operations remotely from the Netwatch Communication Hub, visually verifying the intruders and intervene as soon as security is breached by verbally alerting the intruders they are being watched with a personalised warning.  

Netwatch is experiencing significant demand for its services in all of its active markets driven by:

  • The size of the UK and US markets;
  • Demand for real-time response systems;
  • Pressure from first responders to reduce false alarms;
  • Regulatory developments;
  • Insurance pressure to reduce liabilities

Announcing the Fund’s investment in the Netwatch Group,

Investment Director of The BDO Development Capital Fund, Andrew Bourg, commented:

“We are delighted to partner with Netwatch and look forward to supporting and assisting them achieve Netwatch’s international growth objectives.  The Netwatch Group, led by its ambitious management team, has proven itself as a premium provider of remote video monitoring and security systems both domestically and internationally.  It now has significant and exciting growth opportunities to further scale internationally, which is what the BDO Development Capital Fund is designed to both accelerate and support.”

Netwatch Group Chief Executive, David Walsh, said:

“In the middle of the recession, we focused on research and development and expanding the business internationally. This funding announcement is validation of that decision and also lays the ground work for the next three years. The Netwatch value proposition is well received in the USA and this investment will enable us to capitalise on the great opportunity that the US presents. We are confident that we can double the size of the company over the next three years.” 

Enterprise Ireland CEO, Julie Sinnamon, commented:

“A key role of Enterprise Ireland is to help companies innovate and scale internationally. We are delighted with the investment by the Fund into Netwatch.  This is exactly the type of investment that our Development Capital Scheme was set up to make, which is to provide our client companies with the funding to reach the next level of scale.  Enterprise Ireland has supported Netwatch through funding and participation in stock exchange IPO programme.  The investment fund will enable company to further expand in global markets.”

Donal Duffy, Director, Corporate Banking Ireland, Bank of Ireland said: 

“We are delighted to partner with the BDO Development Capital Fund in providing long-term financing to the Netwatch Group, a leading international technology company at the forefront of security surveillance.  Bank of Ireland has a proven track record in supporting Irish businesses with global reach and we are delighted to continue our relationship with Netwatch to help achieve its future ambitions.”

Netwatch were advised by EY and William Fry while Eversheds acted for Development Capital. 

The BDO Development Capital Fund forms part of the Government’s Development Capital Scheme, an initiative under the Action Plan for Jobs through which a total of €225million is being made available to mid-sized Irish companies with significant growth potential. As part of this Scheme, €75million in funds from the Department of Jobs through Enterprise Ireland will be matched with €150million of private sector funding for investments in Irish companies through a series of different funds.

ENDS

Note for editors: Photographs of the announcement are available through the following Dropbox link: https://www.dropbox.com/sh/juwdarcuns5rey5/AADSY7ZS2NrwRIjhEtTmpBJFa?dl=0

For reference:

For BDO Development Capital Fund:

Conor Dempsey, Dempsey Corporate

Tel: +353-(0)86-247 9892/ E-mail: conor.dempsey@dempseycorporate.com

For Enterprise Ireland: Press Office - +353-(0)1-727 2000

For Netwatch Systems

Cyril Moloney, PSG Plus, Email: netwatch@psgplus.ie /Phone: 0860479462

Rachel McFaul, PSG Plus, Email: rachel.mcfaul@psgplus.ie /Phone: 0857827230

 

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. 

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, which will invest in approximately 15 companies in total, invests between €2million and €10million in each investee company for an investment term of five years.

The companies already invested in by the BDO Development Capital Fund since it was launched in 2014 are Version 1 (IT Services - €8m); Lifes2Good (Health & Beauty - €5m); Perigord (Life Sciences Packaging) and ObeliskGroup (Telecoms & Utilities Infrastructure - €3m).

BDO Smart Funding Model and Advisory Board Led by Investment Directors Sinead Heaney and Andrew Bourg, the team at Development Capital operate 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:  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). www.developmentcapital.ie

 

About Netwatch

Established in Carlow in 2003, Netwatch deploy the most advanced video processing technologies to proactively monitor and protect their client’s properties and assets.

Netwatch’s technology and service is unlike any other currently on the market. Netwatch is unique as it proactively protects properties using live audio warnings to ward off intruders. Intervention Specialists direct operations remotely from the Netwatch Communication Hubs in Newry and Carlow, visually verifying the intruders, and intervene as soon as security is breached by verbally alerting the intruders they are being watched with a personalised warning. In the majority of cases intruders flee the scene upon hearing the audio warning – preventing the crime from ever taking place. In all other circumstances, the authorities are notified and the Intervention Specialists are able to give them insight into the situation before they arrive. Since 2003, Netwatch has prevented more than 40,000 crimes and currently monitor in excess of 35,000 cameras across the globe. Netwatch was the first company in Europe to combine specialist video processing technologies with satellite communications to provide safe, preventative, immediate and cost effective protection solutions for clients. Netwatch now employs over 150 staff and operates in four continents with clients across Europe, South Africa, the Middle East and the USA.

 

About Enterprise Ireland

Enterprise Ireland is the Irish Government agency that works with Irish enterprises to help them start, grow, innovate and win export sales on global markets. Enterprise Ireland partners with entrepreneurs, Irish businesses, and the research and investment communities to develop Ireland’s international trade, innovation, leadership and competitiveness.  The ultimate objective is increased exports, employment and prosperity in Ireland. www.enterprise-ireland.com

 

ENDS