In This Article:
9 SEPTEMBER 2024
NORTHERN 2 VCT PLC
THE NORTHERN VCTS EXIT GENTRONIX
Northern 2 VCT PLC (“the Company”) is a Venture Capital Trust (“VCT”) launched in 1999 and managed by Mercia Fund Management Limited. The Company’s objective is to provide long-term tax-free returns to investors through a combination of dividend yield and capital growth, by investing in a portfolio of investments mainly comprising unquoted venture capital holdings. In order to maintain approval by HM Revenue & Customs as a VCT, the Company is required to comply on a continuing basis with the provisions of Section 274 of the Income Tax Act 2007.
Gentronix, the UK-based contract research organisation (CRO) that is a world leader in genetic toxicology, has been acquired by Scantox Group of Denmark for an undisclosed sum.
The deal provides an exit for Mercia Ventures’ Northern VCTs, which have sold their stakes in the business for a combined £14.8 million, representing a 4.5x lifetime return on investment. Northern 2 VCT PLC received proceeds of £5.1 million. The benefit of the uplift in valuation received upon exit will be factored into the next Net Asset Value announcement.
Gentronix, which is based in Alderley Park in Cheshire, provides predictive toxicology services to the global pharma and chemical industry, enabling clients developing new drugs or products to identify genotoxic compounds at an early stage. The company also has expertise in ocular and skin sensitisation assays.
Founded in 1999 by Professor Richard Walmsley, Gentronix now employs almost 70 employees, having doubled its workforce since 2021. The company received the King’s Award for Enterprise in May this year after increasing its overseas earnings by 239% over three years, driving annual revenue to over £10m, with export sales accounting for 81% of that.
Following the acquisition, Gentronix will continue to operate under its current name and from its existing premises. The deal will give it access to new global opportunities while enabling Scantox to expand its services in response to client demands and provide a one-stop shop to support drug development in the lead up to human trials.
Matt Tate, CEO of Gentronix, said: “Becoming a part of Scantox Group is a fantastic next step for Gentronix, opening up unique possibilities for us to offer an even greater service portfolio to our clients. The scale-up journey at Gentronix has been strongly supported by Mercia and the Northern VCTs. Alex Gwyther and the team have been fantastic investment partners, working with us to develop a successful CRO that now has the opportunity to continue its growth within the Scantox group.”