Managing director of Cascade Technologies, Iain Howieson, has been put in line for a multimillion payout from the company being sold to a US engineering giant in a deal believed to be valued around £40m.
Other shareholders in the Stirling-based business also look set to net big returns on their investments in Cascade. including Crawford Gillies, chairman of Scottish Enterprise. Scottish investment houses Panoramic Growth Equity and Braveheart Investment Group had significant stakes in the business.
Cascade has developed technology that can be used to detect gas leaks and explosives and the company has been bought by Emerson, a listed American business, in a deal that reflects overseas interest in Scottish technology firms.
The business came out of Strathclyde University by a team led by Howieson, who has said its technology offers a much faster and more reliable way of detecting gases than others. It can identify gases from unique fingerprints detected by the lasers.
The company’s technology for detecting explosives has been trialed successfully at Glasgow airport.
The company had a £1m profit in the year to March after recording a big increase in sales boosted by its success overseas. Emerson’s move follows a period of growth at Cascade Technologies, which has built up an international customer base.
Cascade Technologies grew turnover to £6.1m from £3.5m in the preceding year. Around 85% of sales are generated overseas. Europe, Asia and North America are big markets.
A market source said the valuation put on Cascade was in the region of £40m. However, details of the deal with Emerson were not disclosed. The latest annual return submitted by Cascade Technologies Holdings shows the company had around two million shares in issue on 10 September.
Gillies had 4,226 shares, around 0.2 percent of the total. Ivor Tiefenbrun, founder of the Linn Products audio technology firm, had 3,322. Howieson had 139,387, around seven percent of the total. This would indicate his stake was valued at around £3m by the deal.
A fund managed by Panoramic Private Equity had the biggest holding, 738,699 shares, around 40% of the total. A £40m deal would value a shareholding of that size at £16m. Panoramic Growth Equity invested £1.7m in 2011.
Stephen Campbell, a partner at Panoramic, said: “This is an example of UK manufacturing at its best. We are very proud to have given this business the financial and operational support that it needed to achieve such impressive growth over the last three years, becoming a truly international player with market-leading products.”
Panoramic had provided invaluable help in growing the company in international markets and tripling revenues in the last three years, Howieson said. He added: “We very much look forward to the next chapter under the watch of our new owners, Emerson.”
Emerson has approximately 115,000 employees based at 220 manufacturing locations worldwide, with headquarters in St Louis, .
Perth-based Braveheart Investment Group appears to have more than doubled its money on its investment in Cascade.
Braveheart said it had received a net cash consideration of £389,655 for its minority shareholding in Cascade. The company acquired the shareholding in 2006 and in 2008, investing an aggregate of £149,969.
The company said around 40 of its private clients also realised their shareholding in Cascade and most should benefit from the tax reliefs provided by the Enterprise Investment Scheme (EIS).