Graham Morgan

Arjuna Technologies Ltd (ATL) is a world leading innovator in reliable, large-scale distributed systems and has built an international reputation for delivering mission-critical products to global software vendors. After four years of intensive development the Company has just launched its latest product, Arjuna Agility™ (Agility) targeted at the Cloud Computing market.

Industry analysts strongly agree that Cloud Computing is disrupting and reshaping the IT marketplace. Over the next two to five years analysts predict that there will be explosive growth in demand for Cloud Computing, and broad adoption of Cloud technologies – Merrill Lynch recently estimated that the Cloud Computing market opportunity will amount to $160BN by 2011. After four years of intensive product development, ATL now holds early-to-market advantage with a unique solution developed from first principles. ATL’s established and experienced management team is determined to fully exploit the Company’s strong initial position in this market by the implementation of a well conceived growth strategy centred on Agility.

The promise of Cloud Computing is both to improve the utilisation of existing computing resources and to allow resources to be delivered as a service by external suppliers. Agility tackles the fundamental issues constraining flexible exploitation of Cloud technologies, ensuring scalability, fault tolerance and the ability to continuously adapt to change. In so doing, Agility recognises the human barriers that restrict resource sharing such as risk, trust and control.

ATL is guided by a tightly knit management team which has been together since 1990 and has a track record of successfully exploiting innovation. Steve Caughey (MD) led Arjuna Solutions to acquisition in 2000 by Bluestone Software, for $13.5M and negotiated the trade acquisition of ATL technology IP to JBoss in 2005 for $4M.

In 2009 Steve approached the Business Investors Group with an investment opportunity. BiG members, led by Alan Clark and Alan Mordain, evaluated the company, its product and the market, and after a period of intensive negotiation agreed to an investment of £150,000 as part of £450,000 package obtained from a consortium which also included Barwell plc and EDNE. Alan Mordain of BiG and Alec Mackie of Barwell plc joined Mark I’Anson and John Carney as non-executive directors following the investment.

With this investment ATL have completed product development and are now working with ‘lighthouse’ customers to qualify the product and inform further development. With those customers in place ATL will be well-placed to market Agility to national and international enterprises, and to, once again, exploit their extensive network by developing partnerships with global software partners.

Steve Caughey says of BiG: “Even before the investment discussions were complete BiG members were actively supporting and assisting the company by exploiting their regional connections. We found dealing with BiG to be straightforward and uncomplicated. They explained the process in advance and delivered on their promises. I look forward to working with them in partnership to maximize the potential of our Agility product and return on investment.”

Steve Caughey
Managing Director
Arjuna Technologies Ltd

Quick TV was formed in November ’06 by Tod Yeadon and Nick Bell in order to provide services to businesses in the broadcast, the internet and mobile sectors.

The principle benefit provided by the company to its subscribers is the better use of video through viewer interaction. At the time the main viewer response mechanic in broadcasting was premium-rate calls and texts. Video on the internet was largely the domain of social users and there was virtually no video at all on mobile phone handsets. So it took a considerable leap of faith for anyone to put their hard-earned cash into a start-up with no revenues in its chosen market sectors.

In early ’07 North Star had provided funding to Quick TV for a Proof of Concept, used to demonstrate that the technology is viable. The broadcast market was selected for the deployment of this fund and after several months of buying, begging and borrowing a demonstration of an innovative interactive service was made live on the BSkyB platform. This was followed by an offer by North Star of seed capital from a fund named COIF, the condition being that a substantial percentage of the minimum funding requirement should come from private sources.

With property values still increasing rapidly and the stock market performing at record levels it was no easy task to persuade investors to come on board but in the late summer of ’07, Tod and Nick were invited to make a presentation to BiG at the Riverside cricket ground. Despite not having the airtime to reproduce a live demonstration the presentation was well received and soon afterwards several members, led by Tom Speir, committed sufficient funds which, when combined with management’s contribution, was sufficient to get the business underway.

A year later the company was preparing to launch the Quick TV service, its primary focus having shifted from broadcast to the internet. By then Tom had been appointed Chairman not so much for his familiarity with matters digital but for the experience he brought to the job. At this point it was time for a top-up funding round (as always expected – the business was running under budget and on schedule but needed a more substantial marketing budget) but the recession had hit and funding had become scarce.

Once again North Star came in with an offer from the COIF fund and once again a significant part of the private money was found through BiG members.

The full commercial launch of Quick TV’s online service takes place in early ’09. Despite the prevailing economic conditions prospects are good due the demand for video on the internet holding up well and the quality of the service making it both unique and attractive to potential users. The role of BiG members in helping the company to this point has been of great significance, both in the unhesitating provision of funding when needed and the strategic guidance of the company during its crucial development phase.

Tod Yeadon
Managing Director
Quick TV

The Business Investors Group (BiG) has been behind me and my i-snapshot team since its sales-management package was a twinkle in my eye two years ago. Since then, BiG investors have seen their initial investment of £200k reap the rewards of growth and a second chance to invest.

The March 2008 investment round raised a further £1million from a combination of north east and USA investors and is being used to fund the global roll-out of the i-snapshot offering and development of two associated products: textmereminder.com and saveoursale.com.

Underpinning the investment success is an impressive ‘hockey stick’ of growth. From two employees 18months ago i-snapshot and its parent company Profile Analysis now offer employment to 30 people in Middlesbrough, Hamburg and the USA and are recording UK sales of £75k per month on a 90% plus gross-margin. In addition to the owned offices, the company also has seven international distributorships and is looking to build sales to £30million over the next three years. At that point it may be a good time to sell!

We attribute our success so far to the introduction of disruptive technology in a seemingly crowded marketplace. I have always been a great reader and have built a business model that is scaleable and reproduceable across country boundaries. It is based on suggestions from the Crossing the Chasm consultancy in the USA. We are now boasting an international client list of large companies with between 100-300 field sales staff and offering our larger customers a return on their investment in seven days.

With my eyes firmly focused on global growth, I still feel indebted to the Business Investors Group who helped me get my idea to market in the early days, investing in disruptive technologies is always a tough call. I’m also delighted that BiG members had the vision to support my product and help take it to market. They deserve the returns that they will receive from those investments.

Alan Timothy
Chief Scientist
Profile Analysis

Eight years on and the BIG investment in Perfiliate (sold for an undisclosed sum as Buy.at to AOL in February 2008) remains the group’s most successful syndicated investment ever. The BIG investors took the plunge into an uncertain dotcom marketplace in 2000 and have reaped the returns!

Colin Coates, Chairman of BIG said: This investment has certainly had to dig deep and face many challenging issues over the past few years, but with great energy and endeavor, and with great team support, the business was triumphant in the end for all concerned.

Steve Brown and his co-founders, helped by BIG and Northern Enterprise Ltd, saw in 2000 what the marketplace has only just woken up to – that online marketing had the potential to become very big business. More than £2.1 billion of retail sales were generated through this channel in 2006. Back in the dotcom doldrums it was a different matter and Perfiliate was a different business, but Steve and his colleagues shifted the early emphasis from web-redirection to focus on growing a business that relied on the weaknesses of competitors in an emerging marketplace. Steve Brown is clear that that business wasn’t his idea, but that he joined it as a profit focused finance director looking for an exit.

Between 2002 and the sale in 2008 Buy.at grew to become the UK’s leading affiliate marketing company. At the time of the sale revenues had grown over 200% a year for the previous three years with the company reporting turnover of £19m for the calendar year 2006.

Not bad for a business launched into the quiet period and against established competitors and certainly not bad for the investors who followed a hunch and the management team!

Steve Brown
Managing Director
Perfiliate

The original company was started by Tony Smith and Steve Binks in 2001 with the aim of providing quality products into niche audio market-sectors. Both directors had considerable experience of the markets, and realised that it was an opportune time to sell better products than the established suppliers.

The Company started with induction loop amplifiers, which are required to comply with the Disability Discrimination Act 1995 (DDA) and are installed in counters accessed by the public who might be hard-of-hearing.

Current Thinking’s product portfolio in the loop amplifier sector has been expanded (see below). The Company has also moved into the voice alarm market, where recorded or spoken messages replace warning bells or klaxons – an area which is subject to UK and European Standards. The Company is now establishing itself as a leader in the supply of quality, specialist-audio products.

Products

The first product group is that governed by the Disabled Discrimination Act, including various induction loop amplifiers, disabled call systems and a range of portable loop amplifiers.

In addition, Current Thinking has developed a second range of new products for the voice alarm sector, with its Audio Logistics range (see http://www.current-thinking.com). Other related products include especially designed fire telephones, and optical fibre networks and couplers.

To achieve its objectives the Company has invested in the latest modern manufacturing technologies. It also provides in-depth training for its skilled staff and for its key customers.

To provide fast adaptation and implementation of its products to suit various application environments, the Company has developed proprietary software systems for control and monitoring. Thus, the same piece of hardware can be quickly and easily adapted to suit different application environments.

BiG involvement

In June 2002, Current Thinking was introduced to the Business Investors’ Group (BiG) by the Northeast Business & Innovation Centre (BIC) at Sunderland. The company, which had relocated to BIC premises, was seeking funding to expand its sales and staff by recruiting a sales manager in the south of England, and to upgrade its manufacturing operations.

A period of due diligence resulted in an investment of £100,000 that was contributed by seven BiG members and one of the Company’s customers who joined the consortium. The Company started its newly funded operations in January 2003.

Two BiG non-executive directors were added to the Board, to join Managing Director, Anthony C Smith, and Operations Director, Steve Binks. The non-executive directors bring business development, financial and strategic planning expertise, and substantial general business experience to the Board, to complement the technical and manufacturing skills, and sector expertise of the two executive directors.

Performance

The loop amplifier product sales have increased steadily over the past two years, partly in response to the DDA legislation that came into force in October 2004. Sales of these products continue to increase as UK organisations move, albeit somewhat slowly, to comply with the legislation. Similar legislation coming into effect in the rest of Europe has stimulated loop amplifier sales there, too.

Over the 18 months since the BiG investment, the whole voice alarm sector has been depressed, as buildings have been completed but not finally fitted-out. In spite of these less than easy market conditions, Current Thinking has built up market confidence in its voice alarms: it has now established valuable alliances and completed several prestigious installations around the UK. The order book is healthy, and the prospects for 2005 look good.

Financially, the Company is profitable and expects to pay dividends to the Investors this year.

Involvement of BiG

Not only has BiG provided funds that allowed the company to expand at a critical period in its existence, but the collective business experience of the Directors has helped nurse the Company through two lean years to a position where we can look forward to further improving the sales and performance.

The Board always has an eye to exit strategies for the Investors, but further development and expansion of the Company is expected before its full potential value will be realised.

Exit

Back in 2011 the business was sold to Coopers Industries for an undisclosed sum.

Anthony C Smith
Managing Director
Current Thinking Ltd

Eclipse Translations Ltd is a translation company that specialises in translating legal, financial, medical, technical, commercial and defence-related documents in a secure environment. It also provides interpreting services and language training. It was incorporated in December 1996 and rapidly grew into the largest translation company in the Northern half of the UK. The company came into contact with BiG in mid-1998 via the referral of a retired Merchant Banker who was aware that the company was seeking external support. That support was needed to facilitate further sustainable and profitable growth and to achieve its goal of becoming No.1 in the UK and a major player in Europe. The response from interested BiG members was swift and following detailed discussions and appropriate due diligence an investment was concluded in November of the same year.

The decision by the Eclipse MD, Trevor Crowe, to move the business forward with BiG on board was not merely based on the offer of equity. Whilst equity was important, the clear benefit to the business, above other funding organisations, was the BiG formula of Equity and Expertise. This of course had to be combined with a ‘personality fit’ – the BiG marriage is the longest of any marriages that the MD has known!

Identifying and freeing up the key skills of the MD and creating a Board of Directors consisting of experienced individuals with supporting skills (and a personal stake in the business) has resulted in turnover rising more than three-fold in five years (to £1.5m), a current growth level (Q1 2004) of more than 56% compared to Q1 2003 and a balance sheet of considerable strength. GP and profitability are exceptional and the company can be classified as a genuine people-based, cashgenerating service organisation.

Eclipse also built its own purpose-built European Translation Centre on a one-acre site on the outskirts of Alnwick, Northumberland, with a floor area of 7,500 sq.ft. and space to accommodate future expansion. The Centre was opened in October 2001 and is the most secure translation site in Europe, a fact that has assisted in fuelling growth in its key markets.

In addition to the benefit of strong management support that was provided by the Board and the fact that the investment was not time-related was also a major factor in the success of Eclipse. From the beginning it was agreed that an exit would not be until the expectations of the MD would be met and a good ROI achieved for the BiG members. Consequently, the business was not ‘forced’.

The exit ultimately came on 1 February 2005. This followed several months of negotiation with a listed company during which the skills of one of the founding BiG members, John Garrod, were deployed with outstanding effect, resulting in a cash offer for the company and an immediate exit for the MD. The offer was beyond expectations and the MD has been able to take an early and very comfortable retirement. BiG investors have also achieved an exceptional ROI.

Undoubtedly, the secret of the success has been the BiG formula of Equity and Expertise, coupled with patience and nurture. The smaller slice of the BiG cake has certainly turned out to be worth far more than other alternatives.

Trevor Crowe
Managing Director
Eclipse Translations Ltd

Transforming a Craft Business

Olivia’s Artisan Foods Limited bakes high quality artisan bread and creates interesting and delicious food, which is currently sold through five specialist bakeries and cafes, located in Darlington, Hurworth, Northallerton, Thirsk and Stokesley.  The range of bread and baked products are also supplied to hotels, restaurants, pubs and other distributors across the North of England.

The business was established in September 2012 to acquire the Clervaux Artisan Bakery and Cafe. The bakery and cafe was operated by the Darlington based charity, Clervaux Trust, set up as a social enterprise providing work experience for vulnerable adults.  It also operated a food ethos committed to creating all of its own food, sourcing organic and local ingredients to create very high quality and nutritious products.

Under the new brand, ‘Olivia’s Artisan Bakery and Cafe’, the food ethos of the Trust and the support for vulnerable adults remain, but the enterprise has a more commercial focus. In the past 2 years the turnover has grown to £1M and there are now 60 staff spread across the business’s five locations.

Following the successful implementation of the 2102 to 2014 business plan the challenge for the Directors of Olivia’s Artisan Bakery & Café was to put a plan in place that would enable them to increase revenues and profitability four to five times over the next three years. The tasks could be viewed simply as obtaining the funding to enable bakery capacity to expand and to open more outlets but the growth of the enterprise involved defining in detail the business and marketing focus of Olivia’s Artisan Bakery & Café and the internal transformations that will support the expanding business.

Prior to seeking the finance required for taking the enterprise to the next level – £4M+ revenues and over 100 people employed – the Directors of Olivia’s Artisan Bakery & Café asked Generate Ventures LLP (GVN LLP) to conduct a review of their operations and to prepare a business plan to define the finance required for the growth and transformation of the enterprise. Once that document was signed off by the Directors Olivia’s Artisan Bakery & Café worked with GVN LLP to obtain the six-figure sum required from grant applications, equity funders, loan and asset finance providers. The funding was obtained in September 2014 with the business transformation project commencing on time in October 2014.

BiG Members and associated private investors provided over 40% of the Olivia finance package.

Rick McCordall, Managing Director of Olivia’s Artisan Bakery & Café
Colin Coates and Gavin Form from GVN LLP were instrumental in helping us raise the necessary finance to fund our expansion plans.  In addition they opened our eyes to appreciate the importance of the wholesale market to our growth plans and to the need to extend our product range to increase both customers spend and service levels.

Chris Gilman, Finance Director of Olivia’s Artisan Bakery & Café
In preparing the business plan for us GVN LLP introduced innovative thinking and the minutia of detail required to successfully implement a business change programme. They challenged our thinking and brought clarity to our decision-making. We now are fully aware of the additional experience and skills the business requires to continue to be successful as we expand our operations. The recruitment programme is in full swing.

Colin Coates – BiG Chairman
Rick and Chris have demonstrated over the past two years their ability to change a business and meet fiscal and expansion targets. I am sure they will be able to replicate that success while implementing their 3-year strategic plan.

Project Progress – May 2015
Since receiving the new funding in late September 2014, Olivia’s Artisan Bakery & Cafe has progressed rapidly to execute the business plan.

The central bakery & kitchen has been moved to a larger production facility, which has enabled the business to significantly grow output. This has allowed Olivia’s to engage the wholesale market with very positive early results.

The management team has been restructured and strengthened with the key addition of Adrian Watson as Director of Food & Operations. Adrian has over twenty-five years’ experience in the food sector, including seven years at the 21 group.

The Company is in the process of opening two new flagship outlets; on the High Street in Gosforth and on Goodramgate, York