Panoramic Growth Equity (“Panoramic”), the leading debt and equity investor in UK regional SMEs, today announced that Panoramic Growth Fund 2 LP has fully exited its investment in Photonic Solutions (“Photonics”), an Edinburgh based major supplier of optoelectronic components to UK academic institutions and industry.
The transaction resulted in a 25% IRR for Panoramic over the 5 year hold period and it is the second exit for the Fund this year following the sale of Plumbworld.
Panoramic funded the original Management Buyout of Photonics in 2017 and the exit involves the purchase of Panoramic’s shares by the full employee team with debt funded by Beechbrook Capital. The initial MBO was undertaken using an innovative structure that was designed to provide both parties with their main objectives – the ability for the employees to eventually own all of their business and the ability for Panoramic to achieve its target return.
Panoramic’s investment was led by Stephen Campbell and David Atkinson. Legal advice to Photonics was provided by Claire McCracken of Weightmans LLP and the debt for the employee buyout was provided by Beechbrook Capital.
Andrew Blain, CEO of Photonics, said: “We had concerns about working with a private equity investor and were open with potential investors about our eventual aims to own the business outright. Panoramic have worked alongside us to achieve this objective and have kept their word to make the Employee Buyout a reality.”
Stephen Campbell, partner at Panoramic, said: “It has been a pleasure to work with Andrew Blain and the wider team at Photonics who have done everything they said they would do, doubling sales and profits over the last few years despite a challenging environment for research institutions. We look forward to staying in touch with them as they build the business further under full employee ownership.”