Deal round-up 17/02/03

Sovereign leads special needs schools buyout; Gresham backs Altair Filter MBO; Credit Lyonnais invests in French biopharma; UK wireless firm raises £3.5m; T-Mobile, Giza back Flash Networks

Sovereign leads special needs schools buyout


UK-based private equity firm Sovereign Capital has led the £22m buyout of Honormead Schools, a UK-based group of residential schools for children with special educational needs.

Sovereign Capital has supplied funds to back the buyout and to finance acquisitions which it says have already been identified. In addition the funds include capital to finance organic growth. Bank of Scotland's specialist property finance unit provided the debt funding.

This latest transaction is the fourth investment in education and healthcare services that Sovereign has made in the last ten months. The other investments are the management buyout of Complete Personal Assistance, a UK provider of specialist care for young severely disabled people; the MBO of C.H.O.I.C.E., a provider of residential services for adults with learning disability; and the IBO of Davies Laing & Dick, an independent schools group.

Gresham backs Altair Filter MBO


Mid-market private equity house Gresham has backed the management buyout by Andrew Steel and Steve Wenger of Altair Filter Technology, in a deal which values the filter systems and acoustic equipment manufacturer at £24.5m.

The funding package includes a £14m investment by Gresham together with £10.5m in debt and working capital funding provided by Bank of Scotland Corporate Banking.

The management buyout team was led by former sales director Andrew Steel, who becomes chief executive, and Steve Wenger, managing director in the US. They are buying the business from Roy Cleaver, Ian Church and private equity group 3i which backed the two previous owners in 1989.

Credit Lyonnais invests in French biopharma

Credit Lyonnais Private Equity has led a E6.5m financing round for Diatos, a French biopharmaceutical company. Credit Lyonnais was joined in the round by previous investors GIMV (Belgium), US venture capitalist InterWest, AGF Private Equity (France), Société Générale Asset Management (France) and Sopartec (Belgium).

Diatos, which develops novel therapeutics based on drug-targeting and cellular-delivery technologies, has now raised a total of E17m over two rounds. The funds will be used for the clinical development of Diatos' oncology products as well as to accelerate the development of its core research programmes.

UK wireless firm raises £3.5m

A group of investors comprising MTI Partners, VCF Partners and eTechnology VCT have provided £3.5m to UK miniature mobile antenna developer Sarantel. The funding, which follows a $14m mobile handset contract win in November, will be used for marketing and the introduction of the company's 3G mobile designs. A second closing, due within three months, is expected to increase the total of funds raised to £6m.

VCF was an original investor, alongside 3i, in 2000, and ran the current fund raising from new investors. Before the current funding round Sarantel had raised £8m, including £5.5m from 3i and £2.5m from VCF, who bought out 3i in September 2002.

T-Mobile, Giza back Flash Networks

T-Mobile Venture Fund, the venture unit of the European mobile telecoms group, and Isreal-based venture firm Giza Venture Capital have led a $6m round for Flash Networks, a Israeli developer of mobile data networks. Other investors included The Challenge Fund, as well as Canada’s Bell Mobility Investments.

Founded in 1996, Flash Networks has offices in Israel, the US and the Netherlands and employs 60 people. The capital raised will be used for marketing, developing corporate relationships with strategic partners and creating future product lines.