Finance Yorkshire has backed robotics and telecoms components business Peratech.
Yorkshire-based Peratech has netted £1.2 million of capital to allow it to expand its presence in the county, build new laboratory facilities and secure new contracts.
The business uses Quantum Tunnelling Composite (QTC) technology, a development invented by mistake by the company’s chief technical officer David Lussey.
According to Peratech, QTC materials are a class of materials developed to advance the capability of switching and sensing systems that are used in robotics, defence and telecommunications. The materials technology works by providing a ‘near-perfect’ insulation and was created when Lussey was trying to find a conductive adhesive.
The structure of the agreement means that the £1.2 million mezzanine deal is a loan investment transaction that has a small equity-linked exit bonus which is said to suit the business’ current requirements and future expectations.
Peratech was recently awarded the title of British Venture Capital Association (BVCA) Regional Management Team of the Year 2012 for the North East.
Finance Yorkshire provides what it calls ‘seedcorn’, namely loan and equity-linked investments of between £15,000 and £2 million. The project is supported financially by the European Union and has secured £30 million from the European Regional Development Fund.
Doug Balderston, chief financial and operations officer, comments, ‘We’re in a strong position in that we don’t need the money now as we’re capable of organic growth through the customers and contracts we currently have.
‘But the technology sector grows very fast so leaving it to organic growth alone puts us at a disadvantage because it risks being left behind by competitors.’
Balderston says that Peratech has used equity and loan investments in the past but has never conducted a mezzanine transaction.
In the future he expects the business’ value to increase to more than £100 million, with contracts already secured in Japan and the US.