Dunedin trust profits from Davenham float

Guy
18 November 2005

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Dunedin Enterprise Investment Trust Plc, which specialises in the provision of equity finance for management buyouts, management buyins and growing businesses, has announced that it will realise part of its investment in Davenham Group Plc on completion of the proposed flotation of Davenham on AIM.

Davenham has announced a successful placing at 254 pence per share, raising £44.6m. Admission to trading on AIM is expected to take place and dealings are expected to commence on Tuesday 22 November 2005.

On the basis of Davenham’s announcement, Dunedin Enterprise will receive net proceeds of £11.2m and will retain 2,561,968 ordinary shares in Davenham Group Plc valued at £6.5m at the placing price. Dunedin Enterprise’s total consideration of £17.7m represents an increase of £5.1m, over its valuation of Davenham at 30 April 2005, a 40% uplift. This represents a multiple of four times Dunedin Enterprise’s original investment (including £2.5m of investment income).

Manchester-based Davenham is a leading independent asset based lender in the UK. It provides lending solutions designed to meet the financing needs of SMEs – typically involving loans of between £10,000 and £3m. This is an attractive market place that is not adequately serviced by mainstream lenders, which tend to adopt a formulaic approach to lending decisions. Davenham has a diverse loan portfolio, with its lending activities organised into three divisions: property finance, asset finance and trade finance.

Dunedin Enterprise invested £5m in Davenham in June 2000 when it led the management buyout of the company from Bermudan based Bank of NT Butterfield & Son.

Davenham’s directors believe that a float on AIM at this time will enable the Company to accelerate its growth plans by strengthening its ability to lend, expand into the Midlands and the South of the UK, and fund selective acquisitions.