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Mercia Technologies sells Science Warehouse
AIM-listed Mercia Technologies has sold one of its leading direct investments, Science Warehouse, to Advanced Business Software and Solutions for £16.9m in cash.
Mercia will received proceeds of £10.5m from the sale and will recognise an immediate realised gain of £600,000, compared with the holding value of £9.9m as at 30 September 2017. This represents a return of 14.2% on its total investment cost of £9.2m.
The cash proceeds will be reinvested over time into both the group's existing and future 'emerging stars'.
Advanced is the third largest UK-headquartered provider of enterprise software and IT services to both the public and private sectors, with clients including Harvey Nichols, NHS Scotland, Sheffield Hallam University and Dart Group.
Science Warehouse is a provider of spend management and eMarketplace systems to commercial, government, higher education, NHS and housing customers. Its cloud-based, software-as-a-service technology, drives efficiencies through the procurement process for both buyers and suppliers and the company also offers wider support for source-to-settle solutions such as analytics, contract and tender management.
Science Warehouse was Mercia's largest original direct investment at the time of its IPO in December 2014.
Chief executive officer Mark Payton said the divestment is further evidence of the company's ability to grow businesses sourced from the UK regions and then crystallise value for Mercia's shareholders.
"The sale of Science Warehouse for an all cash consideration higher than the current carrying value is strong evidence of Mercia's ability to generate profitable cash returns from its proactive portfolio management and, I believe, demonstrates the strength of our investment approach."
At 1050 GMT, the shares were up 2.7% to 38.50p.