NVM supports Cleveland Biotech MBO

NVM supports Cleveland Biotech MBO .

17 June 2013

NVM supports management buy-out of Cleveland Biotech

NVM Private Equity (NVM) has invested £3 million to support the £4.4 million management buy-out of Cleveland Biotech (CBio), a provider of environmentally friendly biological waste treatment products. The change in ownership will allow the management team to build the business organically, taking advantage of the significant growth potential in existing and new markets across Europe.

Stockton-on-Tees based CBio was established in 1992 to provide Nitrifying Bacteria to water treatment plants. The company is now a leader in Applied Environmental Biotechnology developing fermented bacteria for use in a range of biological products which naturally degrade a range of organic pollutants; including grease, fat, oil, diesel, uric acid and limescale. The business is focussed on Food, Oil and Grease (FOG) management and supplies its products to a wide range of Food Service Establishments (FSEs) such as supermarkets, restaurants, hotels and pubs as well as local authorities. This area of the market is immature and overall demand is increasing due to more aggressive enforcement of legislation by water companies and the Environment Agency. FSEs are now required by law to manage their waste effectively to reduce environmental impact.

CBio recently announced that it has doubled its European exports after landing a series of large sales orders from Lithuania for its UK patented pro-biotic cleaning products, which are used in multi-surface and toilet cleaners. Environmentally friendly cleaning products are likely to replace traditional products across the Baltic, so management believes this may open doors to other European markets and even compete with leading UK cleaning brands.

The CBio management team, consisting of Ben Hoskyns (Managing Director) and Dr Tony Brooke (Development Director), have successfully built-up the business together over the years. Ben Hoskyns became Managing Director in 2004 and played a lead role in driving change across the business, notably the strategic development of the FOG management area of the business. He is no stranger to private equity, with prior experience of managing SME focused venture capital funds at the Commonwealth Development Corporation. Tony Brooke joined CBio in 1999 and has over 30 years of practical experience as a microbial biochemist. He was instrumental in the development of the bacterial fermentation processes used to manufacture CBio’s leading patented products.

Ben Hoskyns comments: “We are delighted to complete the buy-out, which is a strategic move for our business as we make plans to expand into new markets and geographies. The NVM team have been extremely supportive during the deal process and made considerable effort to understand our business. We look forward to working together to take advantage of the growth potential in an ever evolving sector of the market.”

Mauro Biagioni, Director of NVM Private Equity: “This is a very interesting sector to invest into right now as FOG management expenditure steadily increases in order to avoid legislative penalties. Ben and Tony complement each other well, bringing to the business extensive experience of applied biology and finance. They have succeeded in helping the business to grow, responding well to market changes. We are excited to be backing an experienced management team with a clear vision for CBio’s future growth.”

Advisers

Tait Walker – Corporate Finance – Michael Smith and Mike Russell

Bond Dickinson – NVM Lawyers – Alistair Scott-Somers and Jamie Pass

Square One Law – Management Lawyers – Mark Lazenby and Marie-Louise Bozonet

BDO LLP – Commercial Due Diligence – Kevin Schofield and Simon Pringle

BDO LLP – Financial Due Diligence – Matt Copley and Matthew Whitehead

Continuum – Management Due Diligence – Steve Wycherley

Aon – Insurance Due Diligence – John Donald

Cleveland Biotech
www.clevebio.com
www.greasebeta.com

NVM Private Equity Limited (NVM) is independently owned with over 28 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing £220 million of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. Typically, NVM looks to invest between £2 million and £10 million in each transaction. www.nvm.co.uk

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Natalie Dickinson

PR & Marketing Natalie Dickinson