Peratech Secures Finance Yorkshire Funding

A £1.2 million ($1.87 million) investment from Finance Yorkshire’s Equity Linked Fund will be used by Peratech, an innovative technology business, to expand its North Yorkshire operations, build new laboratory facilities and secure new contracts.

Peratech, which has its headquarters in Brompton on Swale near Richmond, is the world leader in Quantum Tunnelling Composite technology, which was invented by David Lussey, chief technical officer.

QTC Materials are a unique class of materials developed to advance the capability of switching and sensing systems and are already widely used in robotics, defence and telecommunications. QTC Material has unique properties; while in an unstressed state the QTC Material is a near-perfect insulator, with any form of deformation the material starts to conduct and with sufficient pressure metallic conductivity levels can be achieved.

It was the flexibility of Finance Yorkshire’s portfolio of funding options that helped agree the £1.2 million mezzanine deal – a loan investment deal with a small equity-linked exit bonus which suited the company’s current requirements and future expectations.

“We’re in a strong position in that we don’t need the money now as we’re capable of organic growth through the customers and contracts we currently have,” said Doug Balderston, Peratech chief financial and operations officer. “But the technology sector grows very fast so leaving it to organic growth alone puts us at a disadvantage because it risks being left behind by competitors. At the moment, we don’t have any competitors, but that’s not to say we won’t have in the future.

“We have used equity or loan investments in the past, but the mezzanine investment deal helps take into account where we will be in the next three to five years and was therefore a better fit for our business model and strategy than perhaps a straightforward equity investment may have been,” Balderston added.

Peratech recently won in the Innovation category at the Queen’s Awards for Enterprise for its QTC Technology. It also took the title of British Venture Capital Association (BVCA) Regional Management team of the year award 2012 for the north east.

Now the company is looking to build on its successes by using the Finance Yorkshire investment to grow the business even further.

“David’s experiment to find a conductive adhesive went wrong and resulted in the creation of QTC Material – and that is now the basis for a Yorkshire company that has generated millions of pounds worth of sales around the world,” Balderston said. “In the next three to five years, we expect to grow our customer base and increase the value of the business to in excess of £100m.

“We already have a number of significant contracts around the world including Japan and the U.S which are being managed by our in-house team very effectively,” Balderston added. “However, we have a desire to grow further and attract more contracts and to do that we need to expand our operations and invest in resources, staff and research and development. The Finance Yorkshire investment will help us take on more staff and expand further into our office space. We are also building an advanced laboratory to facilitate enhanced production.”

“The funding provided by Finance Yorkshire demonstrates the breadth of our offering,” Ash Chopra, Finance Yorkshire investment director, said. “Peratech is a profitable, established business and has an excellent management team. As such a mezzanine funding option was appropriate for the business rather than a straight equity deal.”