Significant Exit for Northern VCTs Through Gentronix Acquisition

Northern VCTs Celebrate a Successful Exit with Gentronix

Northern 3 VCT PLC (“the Company”) is a prominent Venture Capital Trust (VCT) that has been providing impressive tax-free returns to its investors since its inception in 2001. This initiative is expertly managed by Mercia Fund Management Limited. With a focus on long-term capital growth and consistent dividend yields, the Company invests primarily in unquoted venture capital holdings, ensuring compliance with tax regulations to maintain its VCT status.

Acquisition Details of Gentronix

In a significant development, Gentronix, a renowned contract research organization (CRO) specializing in genetic toxicology, has been acquired by the Scantox Group from Denmark. While the financial details remain undisclosed, this move marks a strategic exit for the Northern VCTs, which collectively realized £14.8 million from their investments in Gentronix, demonstrating a substantial return on investment at 4.5x. Notably, Northern 3 VCT PLC secured £3.5 million from this exit, which will be reflected in their upcoming Net Asset Value announcements.

Growth of Gentronix

Founded in 1999 by Professor Richard Walmsley, Gentronix has made a significant impact in the pharmaceutical and chemical industries, providing predictive toxicology services that help clients identify genotoxic compounds early in their drug development processes. Operating from its Alderley Park headquarters in Cheshire, Gentronix has expanded its workforce to nearly 70 employees, doubling its size since 2021. The firm was recently honored with the King’s Award for Enterprise for tripling its overseas earnings over just three years, propelling its annual revenue to over £10 million, with a staggering 81% of sales coming from exports.

Future Prospects for Gentronix Under Scantox

Following the acquisition, Gentronix plans to continue its operations under its well-established name while benefiting from Scantox Group's expansive network. This partnership is set to open up exciting global opportunities, enabling Scantox to enhance its service offerings in response to rising client demand. Matt Tate, CEO of Gentronix, expressed enthusiasm about the acquisition, highlighting the unique opportunities this partnership presents to expand their service portfolio and enhance client offerings.

A Strategic Partnership for Growth

Alex Gwyther from Mercia Ventures emphasized the value of patient capital in fostering growth within high-potential businesses like Gentronix. The history between Northern VCTs and Gentronix spans back to 2007, showcasing a commitment to supporting the company’s journey to success. Gwyther remarked on the ideal timing for Gentronix to enter its next growth phase and the promising collaboration with Scantox.

Scantox Group's Expansion Plans

The acquisition enables Scantox Group to bolster its workforce, which is poised to grow to nearly 400 employees across seven European locations. This strategic move not only strengthens their capabilities in lead optimization and regulatory toxicology but also integrates Gentronix’s expertise into their expanding suite of services. Jeanet Løgsted, CEO of Scantox Group, expressed excitement about encompassing Gentronix's capabilities, effectively filling a crucial gap in their service portfolio.

Conclusion

The acquisition of Gentronix signifies a remarkable achievement for Northern 3 VCT PLC, reinforcing its role as a key player in the venture capital landscape. This strategic move reflects the effectiveness of their long-term investment approach and sets the stage for Gentronix's enhanced growth trajectory within the Scantox Group. As these companies integrate their strengths, the future looks bright for both firms, paving the way for innovative advancements in the fields of toxicology and pharmaceutical development.

Frequently Asked Questions

What is Northern 3 VCT PLC?

Northern 3 VCT PLC is a Venture Capital Trust focused on delivering tax-free returns to investors through investments in unquoted venture capital holdings.

Who acquired Gentronix?

Gentronix was acquired by the Scantox Group, a contract research organization based in Denmark.

How much did the Northern VCTs gain from the Gentronix acquisition?

The Northern VCTs collectively gained £14.8 million from their investment in Gentronix, achieving a 4.5x return on investment.

What services does Gentronix provide?

Gentronix specializes in predictive toxicology services for the pharmaceutical and chemical industries, helping clients identify potential genotoxic compounds.

What is Scantox Group's business focus?

Scantox Group focuses on toxicology and pharmaceutical development, offering a broad range of services, including lead optimization and regulatory toxicology.

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