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.

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

Eileen Banks, Press Officer, Enterprise Ireland, 01-7272805, 087-2445814, eileen.banks@enterprise-ireland.com

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 billionin 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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