Draper Esprit acquires VCT manager Elderstreet Investments
Venture capital firm Draper Esprit has acquired a 30.77 per cent stake in Elderstreet Holdings, the holding company of Elderstreet Investments, with an option to acquire the balance of the Elderstreet shares in due course.
Elderstreet is a UK venture capital trust (VCT) manager. It manages Elderstreet VCT which currently has assets in excess of GBP25 million.
Elderstreet provides early stage, development and growth capital for ambitious UK businesses, in most industry sectors with a focus on software and computer services. In 2014, it won the Investment Company of the Year Awards and was VCT Fund Manager of the Year in 2009 and 2010.
The initial consideration has been satisfied by the issue of 73,667 new ordinary shares of one pence each in the capital of the company. The consideration shares will be subject to an 18 months lock-in (subject to customary exceptions). Application will be made for the consideration shares to be admitted to AIM and ESM, with trading expected to commence on 29 November 2016.
Upon admission, the consideration shares will rank pari passu in all respects with the existing ordinary shares of the company. Following the issue of the consideration shares, the company's issued share capital consists of 40,747,576 ordinary shares.
Following the acquisition, Simon Cook, CEO of Draper Esprit, has joined the board and the investment committee of Elderstreet.
Cook says: “We have acquired a stake in a leading VCT manager in the UK, who share our core investment philosophy and we are delighted to be working with the experienced Elderstreet team. We can now offer to investors access to high growth technology companies through a range of vehicles from EIS funds, to VCTs and an ISA qualifying listed evergreen patient capital vehicle with combined assets of over GBP350 million. Draper Esprit is now firmly on the map as one of the major European managers of technology venture capital and growth capital with a long history of successful acquisitions such as 3i’s European VC portfolio, Prelude Investment Trust, Top Technology fund and Cazenove’s VC fund.”
Michael Jackson, chairman of Elderstreet Investments, adds: “Draper Esprit and Elderstreet are well-aligned in terms of investment strategy and most importantly a culture of active asset management in the unquoted companies sector. For our VCT shareholders this co-investment agreement brings enhanced deal flow and the ability to invest alongside Draper Esprit funds into larger more established fast growing businesses. Given the recent changes in VCT rules imposed last year we view the deal as a positive step forward for our VCT shareholders.”