BDO starts talks with listed companies for new €100m fund

Dublin-based accounting firm BDO has commenced discussions with several Irish-listed companies to gauge their interest in investing in its proposed new €100 million fund to take stakes in fast-growing Irish businesses.

Glanbia and CRH, alongside Bank of Ireland, Glen Dimplex and Enterprise Ireland, are among the funders of BDO's existing €75 million development capital fund (DCF).

Its eight investments so far included beauty products company Lifes2Good and surveillance firm Netwatch, and it has €25 million left to deploy.

BDO is interested in widening the pool of listed companies to assemble an estimated €100 million successor to the DCF, which it is expected to launch next year.

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This will provide funding for export-oriented SMEs. BDO is understood to be sounding out several large Irish corporates to assess their interest in the fund, while the investors and agencies in the existing DCF are also likely to be approached.

Remaining cash

A mid-term report for the existing fund discloses it has invested €50 million so far in eight fast-growing Irish SMEs. It plans to invest a further €10-€15 million from the remaining cash in two or three further businesses.

The balance of €10-€15 million from the original €75 million will be used to top up its investments in the existing portfolio.

The fund’s two big wins to date include Lifes2Good, which earlier this year sold its Viviscal hair restorer to the owner of Arm & Hammer toothpaste for €150 million. It also backed software company Version 1, which it exited in recent weeks after the company got €90 million of fresh funding from the UK.

BDO's DCF invested €13 million in those two companies, achieving a return of 250 per cent in each case. It has also invested €3 million in the telecoms services company Obelisk, €9 million in Netwatch, €10 million in telco Blueface, €3.2 million in food company Brodericks, and undisclosed amounts on pharma labeller Perigord and engineering group ATA.

The mid-term report says the DCF has received 350 inquiries from SMEs seeking development funding.

BDO targets companies with revenues in excess of €5 million, exporting potential and the possibility of doubling in size over a five-year period.

In addition to the cash, investee companies also receive advice and support from the corporate funders of the DCF, such as Glanbia and CRH.