NEw £40m fund backing deals that keep businesses Welsh-owned has been launched. Nearly twice the size of the initial Wales Business Succession Fund, it is again being managed by the Development Bank of Wales.
It will back management buyouts and buy-ins of Welsh SMEs
Financed by the Welsh Government and the Clwyd Pension Fund, the fund offers structured equity and debt packages of between £500,000 and £5m with terms of up to seven years. It is forecasting to support more than 1,000 jobs across Wales.
It builds on the inaugural £25m succession fund which closes this year having supported 26 buyouts and safeguarded over 700 jobs since its launch in 2019. The new fund is expected to safeguard 1,000 jobs.
The first investment made through the new fund is a £5m package supporting a management buyout and the future of Tredegar-based Dragon Recycling Solutions (RS). The deal safeguards 120 skilled jobs and marks the third time the development bank has supported Dragon RS since 2016. The package includes £2.25m of equity and £2.75m of debt.
The management buyout team consists of Beth Bysouth, who has been appointed managing director alongside operations director Gerard Howard, financial controller Mikiko Minty, and compliance director Tracy Medlicott, with incoming chair Mark Pulman.
Dragon processes around three million smart meters annually, operating nationwide contracts with major energy suppliers.
Ms Bysouth said: “The smart meter market continues to expand rapidly, driven by technological upgrades and evolving energy infrastructure. With the phase-out of 2G and 3G networks, legacy meters must be replaced with 4G/5G-compatible models, and the natural degradation of lithium thionyl chloride batteries means replacements are inevitable.
"Add to that higher repair rates and incompatibility across energy providers, and the opportunity for Dragon RS has never been clearer. We’re excited to expand our triage, repair and recycling services in order to consolidate our market position and reinforce our commitment to sustainability.”
She added:“We’re thrilled to be taking Dragon RS into its next chapter. The backing of the Development Bank of Wales gives us the confidence and resources to push boundaries, grow sustainably, and continue creating skilled jobs here in Tredegar.”
First Minister Eluned Morgan“The Wales Business Succession Fund was established to keep ownership of businesses in Wales, by supporting management teams to buyout owner managers either looking to retire or realise a return from their equity stakes.
“I’m delighted the development bank will use this new £40m fund to get behind succession deals, which play a key role in keeping businesses rooted in their local communities. Our joint investment alongside the Clwyd Pension Fund will create more opportunities, unlock new growth potential and support the next generation of business owners in Wales.”
Giles Thorley, chief executive of the Development Bank of Wales, said: “With the backing of Welsh Government and the Clwyd Pension Fund as an institutional investor, the new Wales Business Succession Fund will build on the legacy of the Wales Management Succession Fund by supporting economic growth and safeguarding jobs in Wales.
“Dragon RS is a standout Welsh business rooted in Tredegar with a strong commitment to sustainability and innovation. It’s precisely the kind of business that we’re proud to support.”
