Growth Fund - Loans & Equity Case Study

(left to right) Joy Irving of Walker Morris, Richard Feltham of Garbutt and Elliott, Finance Yorkshire Investment Director Ash Chopra and Microdat MD Stephen Midgley

The Company

Microdat is a Leeds-based brewery equipment manufacturer. An established business operating in a growing market, Microdat has seen extensive new product development over the preceding 12 months and, with a strong order book, the business is well-placed to take advantage of a number of significant opportunities.

The management team are well respected in the industry. They use innovative engineering techniques to manufacture products such as cask and keg handling systems, in addition to providing project management services for the installation of equipment in new build and existing breweries.

The company oversees a wide variety of projects for companies ranging from multi-nationals to SMEs and supplies to larger industry players such as Inbev, as well as growing Real Ale brewers including Timothy Taylor.

The Challenge

Microdat had a great year in 2008 with a turnover of £3.6m, a dip in 2009 of £1.7m and then another high of £4.2m last year.

Despite great order books for all three years, the dip was caused by the recession which resulted in a lack of working capital funding, an issue that was still in existence when the Company approached Finance Yorkshire.

The Solution

Finance Yorkshire provided a £500,000 equity investment which Microdat will use as working capital and development capital funding. The equity investment, advised upon by a strong team including Richard Feltham of Garbutt and Elliott Corporate Finance, Paul Johnson of Irwin Mitchell together with Debbie Jackson and Joy Irving from Walker Morris ensured the investment was completed quickly and efficiently with minimum disruption to the day to day activities of the Company.

The investment will also enable the business to recruit new staff as well as developing existing products for new and related sectors.

The Investment Rationale

Microdat is now well positioned to capitalise on significant recent product development, the growth in cask ale consumption, and a strong order book.

Future Expectations

Recent product development will allow the company to explore the application of the product set to markets related to the brewing industry. There are also excellent opportunities to export the knowledge base and product set into Europe and the US.

Note: this case study is from Finance Yorkshire’s previous fund. Read more about Finance Yorkshire

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