Su­gru sale:

The Irish Times - - Front Page - CIARA O’BRIEN

In­vestors in Su­gru will lose up to 90 per cent of their in­vest­ment as com­pany is sold.

Su­gru maker For­mFor­mForm is be­ing sold for about £7.6 mil­lion (¤8.7m) in a deal that will see in­vestors lose up to 90 per cent of their ini­tial in­vest­ment.

The Lon­don-based com­pany, which was founded by Ir­ish in­ven­tor Jane Ní Dhulchaointigh, James Car­ri­gan and Roger Ashby in 2004, will be bought by ad­he­sives spe­cial­ist Tesa in a deal that will save the firm but val­ues shares at 9 pence each. The Ger­man-based firm made a for­mal of­fer for For­mFor­mForm in March.

The of­fer has been ac­cepted by 51 per cent of the com­pany’s share­hold­ers. The sale is set to com­plete next week, and Su­gru staff, along with Ms Ní Dhulchaointigh, are ex­pected to stay on with the com­pany. The move comes de­spite sales of Su­gru record­ing dou­ble-digit growth in the past few years, with the com­pany last De­cem­ber record­ing a sales in­crease of 20 per cent year on year.

The com­pany said an ex­pected sec­ond tranche of fund­ing from a £4 mil­lion debt fi­nanc­ing fa­cil­ity with Cly­des­dale and Yorkshire Bank (CYBG) was pulled back last Novem­ber, caus­ing fi­nan­cial dif­fi­cul­ties for the com­pany.

Su­gru is a mould­able glue that works as a flex­i­ble, ad­he­sive re­pair putty that turns into a durable sil­i­cone rub­ber. The glue was named as one of Time mag­a­zine’s top 50 in­ven­tions in 2010, and has built up a com­mu­nity of users on­line. But although the com­pany had some suc­cess­ful launches in bricks-and-mor­tar stores such as Tar­get in the United States, it found driv­ing awareness and reach­ing more cus­tomers through this chan­nel more dif­fi­cult than it ex­pected.

‘Crit­i­cal junc­ture’

“It’s been harder and taken longer than any­one imag­ined,” Ms Ní Dhulchaointigh said. “We came to a crit­i­cal junc­ture at the end of last year. The bank pulled back from a £1.5 mil­lion debt fi­nanc­ing. It left us very ex­posed.”

For­mFor­mForm made the de­ci­sion be­cause it would need sig­nif­i­cantly more in­vest­ment than an­tic­i­pated to drive awareness of the prod­uct. Share­hold­ers were in­formed of the de­ci­sion on Thurs­day.

Ms Ní Dhulchaointigh ac­knowl­edged it was very dis­ap­point­ing for in­vestors, say­ing it was not the fi­nan­cial out­come that any­one had ex­pected.

For­mFor­mForm is backed by a mix­ture of tra­di­tional in­vestors, bank debt and crowd­fund­ing. In May 2015 the com­pany raised al­most £3.4 mil­lion in a crowd­fund­ing ex­er­cise through CrowdCube. It came back for a sec­ond round of fund­ing in 2016, rais­ing £1.6 mil­lion.

Just un­der half of those who backed the com­pany in its

crowd­fund­ing in­vested less than £100.

How­ever, there were a num­ber of in­vestors who in­vested big­ger sums. The av­er­age in­vest­ment was be­tween £1,000 and £2,000, with some in the £10,000, £20,000 and £50,000 brack­ets.

Su­gru in­ven­tor Jane Ní Dhulchaointigh said that the sale of the ad­he­sive maker was not the fi­nan­cial out­come any­one had ex­pected.

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