LONDON, UK: NetScientific plc, the deep tech and life sciences VC investment group, has announced a significant expansion of its venture capital and corporate finance operations. The company’s subsidiary, EMV Capital Limited, has been appointed to manage Martlet Capital Limited’s approximately £23.3 million investment portfolio.
Additionally, EMV Capital has acquired the operational venture capital business of Martlet Capital, excluding the investment portfolio.
The move is strategic for NetScientific, which had previously invested in Martlet Capital’s initial fundraising rounds and holds a direct stake of 1.38% with an additional 8.2% in capital under advisory. EMV Capital’s active management strategy aims to accelerate shareholder returns following exits from the Martlet Portfolio.
The transaction includes an increase of about 89% in funds under management for NetScientific, recurring investment management fees for at least four years, and carried interest over the Martlet Portfolio. EMV Capital also plans to leverage the Martlet brand to launch two new funds, subject to investor interest.
Under the investment management agreement, EMV Capital will receive annual management fees in the mid-high six figures and carried interest fees based on the fair value increase of companies within the Martlet Portfolio. Martlet Capital shareholders are offered preferential investment terms for the new funds, co-investment rights, and participation opportunities in other investments advised by EMV Capital.
The business transfer agreement details the acquisition of the Martlet Business by MCM, including the team, goodwill, business information, IT systems, intellectual property, and the Martlet director services company. Despite generating no revenues and a loss in the previous year, the acquisition is expected to bring cost savings and synergies for EMV Capital.
The consideration for the Martlet Business includes an initial cash payment and deferred cash consideration based on a percentage of net carried interest received from investments in the new funds. This strategic acquisition positions NetScientific for growth in the deep tech and life sciences sectors.
Dr Ilian Iliev, CEO of NetScientific and MD of EMV Capital, commented: “This non-dilutive transaction represents an important milestone for the NetScientific group, aligned with our objectives to become a leading deep tech and life sciences venture capital investor in the UK and Europe. Robert and his team have created a respected brand within the world-class Cambridge high-tech investment cluster. This is a logical next step in the deepening relationship between our organisations following our initial investment in 2021.
“This important fund management mandate and acquisition of the Martlet business significantly increases the fee income and critical mass of our funds practice. We also gain ‘work in progress’ for the potential launch of two further funds under the Martlet brand and a supportive Martlet investor base.
“I thank Robert Marshall and the broader Martlet team for their collaborative approach in executing this carefully balanced transaction. We look forward to working together to deliver returns for Martlet Capital shareholders and EMV Capital and to further leverage and grow the Martlet brand.”
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