Mercia in £16.9m software firm sale

Investment firm Mercia has sold Leeds-based Science Warehouse for a cash sum of £16.9m to Advanced Business Software and Solutions.

Science Warehouse, a software firm which was founded in 2000 and span out of the University of Leeds, had been Mercia’s largest original investment at the time of its IPO in 2014.

Its new owner Advanced is the third largest UK headquartered provider of enterprise software and IT services to both the public and private sectors in the United Kingdom, with clients including Harvey Nichols, NHS Scotland, Sheffield Hallam University and the Dart Group.

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As a result of the sale Mercia will receive proceeds of £10.5 and will recognise an immediate realised gain of £600,000.

The sale represents a return to Mercia of 14.2 per cent on its total investment cost of £9.2million.

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.

Philip Padfield, chief executive of Science Warehouse, said: “Science Warehouse has enjoyed strong growth since Mercia became an investor in 2014 and has benefited from Mercia’s active investment strategy.

“Mercia’s involvement has enabled Science Warehouse to enhance its technology platform and effectively consolidate and grow in our core markets whilst developing our international presence, at the same time as strengthening our management team and meeting our growth expectations.

“Mercia’s involvement has undoubtedly had a positive impact on the value and scale of Science Warehouse.”

In March 2015 Mercia made a further investment, increasing its equity stake from 45.0 per cent to 62.6 per cent.

Dr Mark Payton, chief executive of Mercia Technologies, said: “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.”

Science Warehouse employs 60 people and is based on Wellington Road in Leeds city centre.