BVG Airflo Group, a multi-channel retailer based in Wales, received a £10m investment from BGF in July 2015.
Established in 1991 by Chief Executive Iain Burgess, the business has grown rapidly from a single person operation to a highly profitable non-high street multi-channel retailer generating turnover in the region of £70m in its current financial year. BVG has increased revenues by over 70% and profits by nearly 300% in the last five years through a combination of organic growth and acquisitions.
The business has a substantial online focus, specialising in the sale and distribution of footwear and clothing, home and garden products, fishing tackle & equipment and sports nutrition products. BVG has a number of routes to market for its products including a highly successful e-commerce function, mail order to its database of over 1m customers and a number of high profile B2B customers.
BVG controls almost every aspect of the business in-house from artwork production and website development through to product design, sourcing, buying, fulfilment, call centre and returns. The Group’s head office is in Brecon, South Wales, and it also operates and owns a 230,000 square foot distribution centre in Skelmersdale, near Liverpool, employing over 325 staff across both sites.
This represents BGF’s second investment in Wales having backed specialist industrial scaffolding business SHS Integrated Services in September 2012. A number of BGF portfolio companies from across the UK are also establishing a presence in Wales including fast-casual Mexican restaurant chain Barburrito which recently opened a site in Cardiff and Better Bathrooms, one of the UK’s leading bathroom retailers which also opened a store in the city.
APSU TWP Limited (‘APSU’), a provider of IT managed services and an IBM Premier Business Partner, announced in October 2014 that it has secured a £7m investment from BGF.
APSU has a specialism in IBM’s Power i range of servers (formerly known as the iSeries and AS/400). Power i (IBM Power Systems running IBM i) is the world’s best-selling mid-range computer system. As an IBM Premier Partner, APSU is IBM’s highest accredited Business Partner in Europe and is the only UK member of IBM’s Global Business Partner Advisory Council. APSU also provides solutions through Cisco, Microsoft, HP and VMware.
The company was formed in 2011 by CEO Steve Morris from the merger of AssurIT with Apex Computers International Limited and is forecasting turnover of £25m next year. It is headquartered in Cirencester, Gloucestershire, and also operates its own data centres. In 2013, APSU was recognised as the fastest growing IT company (Sunday Times Tech Track 100) in the south-west of England and ranked number 20 overall in the UK. Steve has over 25 years’ experience in the IT industry. He founded Catalyst Solutions plc in 1994, growing it to over 500 employees and turnover in excess of $100m, and was subsequently CEO of IFTE Limited, taking it from a small UK business to a world leader in its field before floating on AIM.
BGF’s investment will enable APSU to recruit technical personnel in the UK to support overseas customers and build a bigger sales and operational capability to address the US and other overseas markets. Overseas expansion is being driven by existing customer demand. APSU will now be considering selective acquisitions to enhance its service offering, both in the UK and internationally.
The investment was managed for BGF by Ned Dorbin, Paul Brindley and Edwin Davies. BGF was introduced to APSU by Lloyds Banking Group in Gloucester.
Ned Dorbin, BGF Investment Director, commented:
‘We are delighted to be investing in APSU. It is a company led by an experienced management team, at the head of which is Steve Morris, who has a very successful track record of growing businesses in this sector. This is a fantastic opportunity to invest in a highly accredited business that is well placed to grow by capitalising on an increasing trend to outsource IT services. There is also the potential for considerable overseas growth driven by its strong relationships with IBM and other blue chip vendors, its expertise in Power i and its managed services offering.’
Steve Morris, CEO of APSU, commented:
‘APSU has enjoyed significant growth over the last three years, primarily due to our expertise in Power i and the development and deployment of our unique, cloud-based, managed IT services to companies across all industry sectors.
The investment by BGF will provide the platform to build upon our exceptional growth as APSU develops and expands our unique feature-rich, cloud-based offerings for the UK, Europe and worldwide markets.
APSU has an exciting and profitable future ahead and I very much look forward to working with BGF, as well as continuing to work with our customers and partners, both in the UK and internationally, to ensure that we exceed market expectations for both innovation and quality of services.’
One of the UK’s leading providers of sustainable energy systems received £3.6m of investment from BGF in August 2014.
Established in 2005, Ecovision installs heat pump, solar panels, biomass and gas boilers in thousands of homes, businesses and community buildings across the UK, from stately homes such as Castle Howard through to single bedroom city apartments. Over 5,000 systems have been installed by Ecovision since 2005. The company operates nationwide with its head office located on The Prince of Wales’ Highgrove Estate in Gloucestershire. In its next financial year, Ecovision is forecast to generate revenues of over £20m and in the next three years is expected to install over 30,000 new boilers.
The Ecovision team has already proven its ability to build a successful consumer focused renewable energy offering. In May last year, it sold its Free Photovoltaic business of over 4,000 Solar systems to Aviva, returning the investment and a premium to their investors. Ecovision still monitor and maintain the Solar Panel installations via SIM cards using their own Ecovision Asset Management software.
An additional focus for the business today is Hassle Free Boilers (HFB). Launched in 2013, HFB offers customers a state of the art, energy-efficient, Vaillant gas boiler which saves them up to 40% on their gas bills but requires no upfront cost. This gives the homeowner a saving of £2,000-£3,000 on the upfront cost of a new boiler and further additional savings each year of around £330 from reduced energy bills. HFB aims to compete with the larger, more established energy and utility companies by providing an offering that counters household gas prices in Britain which have risen faster than in any other major European country. Many consumers do not replace inefficient boilers due to the high upfront costs thus missing out on significant savings in their energy bills. With HFB there are no upfront costs and no deposit. All the consumer pays is the regular monthly payments for the service and maintenance plan.
The UK boiler market is the largest in Europe with an estimated 14.8m gas boilers in privately owned households and circa 1.4m new boilers being installed each year.
BGF’s growth capital investment is being used to scale up the HFB offering to create a significant installed base of boilers with contractual revenues, as well as a scaling up Ecovision’s Air Source Heat Pumps (“ASHP”) offering. ASHP can replace energy from oil, LPG and electric heaters and allow a significant reduction in fuel bills and CO2 emissions.
Ecovision is led by successful entrepreneur Peter Randall who, prior to Ecovision, was one of the co-founders of Telco/ISP Telinco which was subsequently sold for $250m in 2000 and then merged with Tiscali. Randall remained as Tiscali’s COO in Milan following the deal.
Peter Randall, CEO of Ecovision, commented:
“We are delighted to be working with Business Growth Fund who are not only providing Ecovision with growth capital but also access to their networks and expertise. Businesses like Hassle Free Boilers need capital to grow rapidly which then means that customers can access much more cost effective energy by buying heating in a smarter way. We are constantly reminded that gas prices are increasing, Hassle Free Boilers makes a step change in reducing energy bills whilst gas prices continue to rise.”
Ned Dorbin, Investment Director, commented:
“This is an opportunity to back a fantastic management team with considerable experience and success already in this sector. There are a number of opportunities in the household sustainable energy market for Ecovision to capitalise on and the team has worked hard to establish themselves in this market and build up their excellent reputation. Our capital, together with the debt facility from Shawbrook, will immediately be invested in the increased marketing of Ecovision’s Hassle Free Boiler offering so that it gains increased momentum and traction in the market.”
BGF continued its investment in the next generation of the UK’s IT & Technology sector by backing Skyscape Cloud Services, the leading provider of cloud infrastructure services to the UK public sector, with a £4m investment in May 2014.
BGF’s capital is being used to further develop Skyscape’s channel partnerships as well as continue investment into direct sales, alongside expanding into the wider UK Public Sector, including healthcare, local government, research and higher education.
Since BGF’s investment, Skyscape has experienced rapid growth, increasing revenues from £3.7m in 2014 to £16.2m in 2015. Employee numbers have doubled in line with this growth and the company has won a number of industry awards including ‘One to Watch in Cloudex 20:20, Gartner ‘Cool Vendor’ and Cloud Provider Innovation of the Year award at the UK IT Industry Awards 2014.
Skyscape was founded in May 2011 by successful entrepreneur Jeff Thomas (Chairman) and two experienced businessmen Phil Dawson (CEO) and Simon Hansford (CTO). The company’s head office is in Farnborough, Hampshire.
The business has achieved great success to date, winning a number of high-profile contracts directly with public sector organisations, including the Cabinet Office, Home Office, HMRC and MOD. Skyscape also provides cloud services to other central government departments as well as a growing number of local authorities and independent government organisations.
Capitalising on the government shift to cloud computing which forms a key part of government ICT strategy, Skyscape is a market leader in the provision of assured cloud solutions to the UK public sector and has made significant investment in designing a cloud platform that is specifically tailored to meet the needs of this market. The business is currently focused mainly on central government departments, supporting more than 70 projects, across 38 customer organisations engaging through over 100 partners.
Skyscape focuses on providing assured cloud services in a more agile, secure and cost-effective manner. Its customers are able to eliminate the need for costly hardware or managed hosting services as well as benefit from simple hourly pricing and no initial set-up fees. This genuine pay-by-the-hour service delivers significant cost savings for Skyscape’s customers, who are able to turn servers off during evenings and weekends, or alternatively, rapidly scale services at times of peak demand.
In November 2013, BGF invested £2.5m in Sub10 Systems (Sub10), a specialist designer, developer and vendor of class-leading millimeter wave (“MMW”) wireless solutions for mobile telecoms.
Sub10’s products are high speed wireless devices for data transfer across mobile networks where historically data transfer has been slow and unreliable. The company’s customers are primarily telecommunications companies and large network operators. Due to the growth in mobile data traffic, many operators are using wireless to save on radio spectrum usage and thereby increase efficiency. This can be achieved by using products such as Sub10’s wireless links where plenty of data spectrum is available for relatively short, high speed, point-to-point data connections. This is ideal for densely packed communications networks such as urban areas and Sub10’s products will help to improve the performance of mobile networks.
Sub10’s aim is to develop the smallest, best in class MMW wireless solutions which are cost effective and installer friendly. The company exports 90% of its products and currently the majority of its sales are to operators in Eastern Europe, Russia and Turkey with the remainder to the UK and Ireland.
Merger with Fastback Networks
In March 2015, Sub10 Systems agreed a merger with US venture capital backed company Fastback Networks.
Fastback, which is based in San Jose, California, delivers innovative mobile infrastructure technology, enabling network operators to deliver enhanced wireless solutions to its customers.
The merger created a group that is able to provide high performance backhaul solutions essential to the deployment of LTE, LTE-A, VoLTE, 4G and 5G mobile networks. The new entity converges Sub10 and Fastback’s powerful and proven technology platforms and intellectual property to enable the industry’s first hybrid – sub 6GHz and mmWave – Any Line of Sight™ backhaul solutions.
The Sub10 Systems operation in Devon became the new European headquarters for Fastback. The combined group is taking immediate advantage of Fastback’s North American sales and marketing presence and strengths, and vice versa for Sub10’s European presence and strengths.
BGF remained as a minority investor in the enlarged entity.
Edwin joined BGF in 2012 and is based in Bristol. His main role is to source and execute investments, whilst also supporting the boards of certain portfolio companies. He has been involved in a number of BGF investments to date in the South West, Thames Valley and Wales and is a board observer for APSU, Ecovision and SHS.
Edwin has over eight years’ experience of investing in, advising and working with SMEs and his previous experience was gained at PwC in London and Grant Thornton in Bristol.
Edwin gained a first class degree in Chemical Engineering from the University of Nottingham and is a qualified ACA. In his spare time he enjoys skiing and playing football, golf and tennis.
- BFF Nonwovens
- BVG Airflo Group
- APSU (Board Observer)
- Ecovision (Board Observer)
- Sub10 Systems
- SHS Integrated Services (Board Observer)
- Direct Online Services (Board Observer)