Founder of AES takes a £1.6m stake in Surgical Innovations

Mr Rea, OBE, will take on a non-executive director role at the Leeds-based firm.

“It’s an innovative business, a UK based manufacturer that is also international,” he said.

“I like the business model. It’s an extremely innovative business in a very interesting space. They’ve got world leadership in microsurgery.”

Surgical said the funds will provide working capital for growth and will help it move rapidly into two key areas of minimally invasive surgery: instruments that can be used in holes of just 3mm and a resposable (part re-usable and part disposable) universal seal port access system.

Mr Rea bought 39.5 million new shares at 4p a share, a discount of 17.9 per cent, to the closing mid-market price of 4.875p on AIM last Friday.

“The business probably needs better processes. I have a suspicion that’s true,” he said.

“They are in a great market. I like the management. I like their passion and I’d like the business to be successful.”

Born in Northern Ireland in 1954, Mr Rea is the managing director of AESSEAL, the UK’s last remaining and the world’s fourth largest mechanical seal manufacturer.

He has spent over 30 years growing the AESSEAL business and was appointed a deputy lieutenant for South Yorkshire in 2011.

Surgical’s non-executive chairman Doug Liversidge said: “The involvement of Chris Rea with Surgical Innovations both as an investor and a board member will be a major asset for the company and a vote of confidence in its long-term future.

“Chris brings his immense experience of manufacturing and international business to the company, at a time when it has established a solid basis for growth.”

In April, Surgical announced a 34 per cent fall in annual profits after the cost of manufacturing improvements and the weak US dollar.

The group, which has moved to a new state-of-the-art clinical training centre at Thorpe Park in Leeds, said pre-tax profits fell to £800,000 after it streamlined production.

Chief executive Graham Bowland said the group is increasing sales to the US, a key target market as it accounts for half of the world’s instrument market. US revenues rose by 73 per cent over the year to December 31.

“Our manufacturing processes couldn’t cope with the increased demand and they fell over,” said Mr Bowland.

“We had to stop the lines and reinvest in them. We’ve learned from that. We’re sorting out the manufacturing side. It cost us a lot of money, but it’s important to do it as it sets us up for the future.” He estimated about 75 per cent of the profits shortfall was due to investment in manufacturing and in the US and 25 per cent was due to the weak dollar.

Last month, Rotherham-based AES reported a 7.4 per cent rise in organic annual sales after seizing market share from its three main rivals.

The business reported its 31st year of consecutive sales and profits growth in 2013.

The firm said total sales increased by 11 per cent to £146.5m, while core earnings rose by 3.4 per cent to £24.6m.

The company has invested £850,000 in a new machine tool for its factory in Rotherham and expects to add another 8 to 10 of these if it delivers benefits.

In spite of the advances, Mr Rea said the strengthening pound made it a tough year for the business. He said the decline of medium and heavy industrial plants and processes in Britain has forced AESSEAL to focus on international markets.