Mercia Asset Management makes two new direct invesments

Regionally-focussed specialist asset manager Mercia Asset Management announced two new direct investments on Tuesday, into Axis Spine Technologies and Nova Pangaea Technologies.

The AIM-traded firm said the investment into Axis Spine came as part of a £10.8m funding round, with Mercia making a direct investment of £3m, alongside £3.8m from its managed funds.

MedTex Ventures, a US-based venture capital firm focused on the medical device industry, invested £3m, with the remaining £1m coming from other external investors.

Mercia said its managed funds first invested in Axis Spine in 2017.

Following the investment, Mercia held an 11.7% fully-diluted direct equity stake in Axis Spine, with funds managed by Mercia holding a further 33.6% fully-diluted equity stake.

“Axis Spine is a medical technology business delivering spinal implants,” the board explained.

“Axis has a highly differentiated platform of modular implants, designed to address the increasingly recognised and unmet clinical need of cage subsidence.

“This technology promises to not only reduce postoperative spinal segment collapse, but also improve spinal alignment in patients suffering chronic back pain and spinal deformity.”

Insertion of Axis' proprietary modular cages required “much less force” than conventional implants, as they are slimmer and have a wider footprint, thus reducing the risk of damage to vertebral segment endplates and the loss of alignment that impacts one in three patients.

The investment into Nova Pangaea, meanwhile, was part of a £5.3m funding round, with Mercia making an initial direct investment of £2.3m via a convertible loan, alongside £1m from its Northern Powerhouse Investment Fund (NPIF) and a further £2m from co-investors.

It described Nova Pangaea as a clean technology business focussed on creating biofuels and biochar to address some of the most pressing climate concerns.

Led by chief executive Sarah Ellerby, Nova Pangaea provides a patented process called ‘REFNOVA’ that converts woody and agricultural residues into high-value sustainable products, used to manufacture sustainable aviation fuel and a range of biochemicals.

The process also produces biochar, which is “crucial” for carbon dioxide removal and soil enhancement.

“These are two businesses we have been excited about for some time, actively supporting them within our managed funds,” said chief executive officer Mark Payton.

“We are pleased to welcome them onto our balance sheet, where we have significant liquidity to support both in reaching their next stage of maturity.

“Both embody what we look for in UK regional businesses, combining innovative technology with deep sector specialism to create real-world solutions.”

At 1021 BST, shares in Mercia Asset Management were down 2.08% at 23.5p.

Reporting by Josh White at Sharecast.com.