Portfolio Update

Foresight Enterprise VCT PLC
LEI: 213800MWJNR3WZZ3ZP42

Sale of portfolio company Innovation Consulting Group Limited (“GovGrant”) delivering a 4.5x cash-on-cash return and an IRR of 25% and the exit from Datapath Group Limited (“Datapath”) delivering an 11.7x cash-on-cash return and a 38% IRR for Foresight Enterprise VCT

The Board of Foresight Enterprise VCT Plc (“FEVCT” or the “Company”) is pleased to announce the sale of two portfolio companies since close of trading on 31 March 2023. The sale of GovGrant to Source Advisors, a US corporate buyer backed by BV Investment Partners, took place on 31 March 2023. GovGrant is one of the UK’s leading providers of R&D tax relief and patent box relief and other innovation services. The transaction will generate approximate gross proceeds of £6.8 million to FEVCT. When added to £0.7 million of cash returned to date, this implies a total cash-on-cash return of 4.5 times the capital of £1.65 million invested in October 2015; equivalent to an IRR of 25% per year.

Since FEVCT made its original investment in 2015, Foresight Group has supported GovGrant through a period of material growth during which it has supported the R&D activities of a growing number of customers. GovGrant’s high levels of service and innovative products, such as the growing patent box offering, have contributed to driving innovation in the UK economy. Foresight Group has taken a proactive approach to supporting the exceptional senior management team, all of whom were introduced to the business during the investment period.

The Board of the “Company” is also pleased to announce the exit on 31 March 2023 of portfolio company Datapath Group Limited (“Datapath”), a global leader in the provision of visual solutions. The transaction generated proceeds of £10.2 million at completion with an additional £2.3 million payable over the next 24 months. When added to £10.8 million of cash returned to date, this implies a total cash-on-cash return of 11.7 times the original investment; equivalent to an IRR of 38% since the initial investment in 2007.

Since the original investment, Foresight Group has supported Datapath through a period of material growth with revenues growing from approximately £7 million to £25 million. Datapath has developed a market leading hardware and software product suite for the delivery of multi-screen displays and video walls which are sold globally to a diverse customer base across a range of sectors.

Including payment of a 3.8p per share dividend paid in December 2022, the Company’s NAV per Ordinary Share was 63.7p as at 30 September 2022, to which the exit will add 2.0p, giving a pro forma NAV per Ordinary Share of 65.7p.

The sale represents FEVCT’s third and fourth exits in the last twelve months, following the exits of TFC Europe and Codeplay Software in 2022.

Raymond Abbott, Chair of Foresight Enterprise VCT said: “With Foresight’s support these two businesses have demonstrated strong growth and we are pleased to announce these two highly successful exits for the Company’s shareholders. Both investments are examples of how patient capital can help to unlock the growth potential of UK SMEs.”  

For more information contact:

Gary Fraser, Foresight Group: 0203 667 8181