Sheffield-based Faradion sold in a deal valued at £100m to India's Reliance Industries

Sheffield-based Faradion is a world leader in sodium-ion battery technology that provides low-cost, high-performance and sustainable energy storage solutions.

Mercia held a 16.4 per cent fully diluted direct holding in Faradion and has received initial unrestricted cash proceeds of £18.6m, plus a further £800,000 ring-fenced for three months.

The asset manager made its first direct investment in Faradion in January 2017 and Mercia's managed funds have held equity stakes in Faradion since its inception in 2010.

The unrestricted cash proceeds of £18.6m result in a profit of £5.7million above Mercia's direct investment holding value in Faradion of £12.9m as at September 30, 2021.

The sale has generated an initial 4.2x return on Mercia's direct investment cost of £4.4m and a circa 72 per cent internal rate of return (IRR).

The sale has also generated combined initial unrestricted cash returns of £30.4m on a total investment cost of £3.6m for Mercia's managed funds, delivering a combined funds return of 8.4x on invested fund capital and fund IRRs of between circa 30 per cent and circa 72 per cent.

Dr Mark Payton, CEO of Mercia Asset Management, said: "We are delighted to announce our successful exit from Faradion, delivering excellent returns for both our shareholders and fund investors.

"Importantly, we have once again demonstrated our ability to realise significant cash returns from our direct investments, underpinning the evergreen status of our balance sheet.

"This latest cash exit, which is 43.5 per cent above September 2021's carrying value, also demonstrates the significant potential unrealised value in the group's direct investment portfolio.

"I am also pleased that we can point to this Sheffield-based business where Mercia has provided both founding investment and subsequent scale-up capital, plus help in building the right management team alongside the founders.

"This ability to provide Complete Connected Capital alongside hands-on support to the most exciting regional businesses, is what makes Mercia an increasingly attractive investment partner for entrepreneurs.

"I would also like to congratulate Chris Wright, James Quinn and the whole Faradion team.

"Securing a sale to Reliance, one of India' s leading companies, is testament to the business they have created and the worldwide potential of innovation that exists in the UK regions.

"We wish them every success under their new ownership and are happy to see the significant ongoing investment announced by Reliance in Faradion."

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Thank you

James Mitchinson