Vitaflo provides MSIF with best-ever return

May 28 2008 by Tony McDonough, Liverpool Daily Post

MERSEYSIDE Special Investment Fund (MSIF) yesterday reported its biggest- ever return from one of its investments.

The venture capital firm will receive £6.6m in proceeds from a company it originally backed with £500,000 ten years ago.

The payout comes as part of a deal that sees Liverpool-based nutritional products company, Vitaflo undergo a £16m re-financing.

As part of the re-financing deal, MSIF’s Venture Fund will inject £3m back into the business. The transaction also includes a funding package from Clydesdale Bank and Vitaflo directors’ personal resources and will allow for the exit of non management shareholders.

As well as its biggest ever return on an investment, the deal also provides MSIF with its largest single investment.

Venture Fund portfolio director, Jerry Mobbs – who made the original investment, and investment manager Jon Wormald, led the deal for the venture capital firm.

Mr Mobbs said: “We recognised the quality in Vitaflo right from the start and its progress has been a huge success story for the company and MSIF. The exit will yield £6.6m for us and a total return in excess of 20 times our initial Venture Fund investment.

“The latest £3m investment is supporting a business and a team we know very well. Vitaflo’s growth has been exceptional and we expect this to continue.

“The management team is being further strengthened through the appointment of Ken McLachlan, an experienced senior executive who has had a leading role in a number of multinational health-related businesses.”

Vitaflo has developed, and sells worldwide, a range of nutritional products to manage metabolic diseases and disease-related malnutrition.

It is one of the global market leaders in its industry and sells products to patients via the NHS and wholesalers in the UK, and through distributors overseas.

The company was formed in 1997 by the acquisition of a small Scottish company, which relocated to its current site at Brunswick Dock in 1998.

The business is run by directors Tony Partington, Bill MacNab and Maura O’Donnell and employs 41 staff. From a turnover of £200,000 in 1998, Vitaflo has grown to its £11m turnover and continued growth in turnover, profits and staff is forecast.

Mr Partington said: “Vitaflo is a great success story for Merseyside. We would like to express our appreciation to MSIF for all the support they have given us, particularly during the early years when they stood by us.”

BILL GLEESON: PAGE 8

tonymcdonough