Having first backed waste oil refining business Whelan Refining in May 2006, fund manager Bridges Ventures has exited its involvement in the company through a deal with the company’s management team.
Bridges first became involved with Whelan when it led a £1.5 million transaction, providing £450,000 itself, alongside Catapult Venture Managers and other debt providers. The deal was completed so that Whelan could refurbish and re-commission an old oil refinery in Stoke-on-Trent.
Following the investment, Whelan turned it into what it claims is the first and only waste oil refining plant in the UK, recycling waste oil to produce base oil to be sold back to the lubricant industry.
By selling its stake to the management team of Whelan, Bridges has scored a 33 per cent internal rate of return and 4.7x the total investment it made from its Sustainable Growth fund I.
The firm’s Sustainable Growth Funds I, II and III back businesses across the areas of underserved areas, education and skills, environment, and health and well-being – sectors which the firm has identified as those creating a positive social and environmental impact. Since 2002, the three funds have made commitments of £77 million in 35 businesses.
Over the course of Bridges’ involvement, Whelan has reportedly diverted 100,000 tonnes of waste oil from use as a low-grade fuel and produced net savings of 300,000 tonnes of greenhouse gas emissions.
John Whelan, managing director of Whelan, comments, ‘Working with Bridges has been a stimulating experience which has allowed us to focus upon benefits to the community and the environmental as well as financial success.’
The divestment marks the third exit that Bridges Ventures has made through its Sustainable Growth Fund in the last nine months. It started off its dealmaking in May 2012 by selling the Hoxton Hotel and then went on to exit its interest in Pure Washrooms the month after.
Philip Newborough, managing partner at Bridges Ventures, adds, ‘For the last seven years we’ve been working very closely with the management team to support the growth of the business and we are delighted with its achievements – shooing once again that strong financial returns and positive social and environmental impacts can go hand-in-hand.’
