Microchip firm gets £4m expansion boost

Published on Monday 25 May 2009 21:54

MICROCHIP manufacturing firm Compound Semiconductor Technologies Global (CSTG) has received a £4 million funding boost to expand its business.

The Glasgow-based firm is to use the cash, secured from private equity funders European Digital Partners (EDP), Scottish Enterprise's Co-investment Fund and the Scottish Government's Regional Selective Assistance scheme, to expand its capabilities through the purchase of new equipment and new technology.

The funding will also go towards further research into compound semiconductor laser products for the next generation of high speed broadband devices.

Neil Martin, chief executive of CSTG, said: "Building on a solid performance over a number of years we've had an incredibly successful few months of trading, and this additional funding will enable us to expand our capabilities and allow our research and development team.

He added: "The ability to buy new equipment will allow us to provide better quality products and services, enabling us to widen our market access."

Business and financial consultant Grant Thornton advised on the deal, which comprises of 2.15m of new investment and the restructuring of a 1.85m loan.

David Cockburn, a partner at Grant Thornton, said: "This is a substantial deal for CSTG and follows just a week after we advised another technology business, Iomart, on its acquisition of RapidSwitch.

"This deal reinforces the message that there are still finance opportunities available in this challenging market for those companies that have strong growth prospects."

He added: "Scottish Enterprise's Co-investment Fund played a pivotal role in supporting this investment. Its investment, with the backing of EDP and the restructuring of CSTG's existing loans, offers CSTG a promising future as it looks to develop into new markets."

CSTG was founded in 1999 and provides specialist foundry services to clients in the telecommunications, defence, medical and instrumentation markets.