EYECARE chain Duncan & Todd has further expansion in its sights after securing a £3.5 million follow-on finance package from the Business Growth Fund (BGF).
The funding deal, which also sees RBS provide additional debt finance, comes as the Aberdeen-based business expanded its presence in the Central Belt with the purchase of 20:20 Opticians which has four sites in Edinburgh and two in Glasgow.
The acquisition will increase Duncan & Todd’s network to 30 branches across Scotland and provides a strong platform to expand further into the central belt.
BGF, backed by five of the UK’s main banking groups and which provides funding for SMEs, originally invested £5.6m into Duncan & Todd in December 2013. Since then, the company has acquired Gunn & Galbraith, an independent optical store in Dunfermline, and has recently completed a £1m upgrade of its manufacturing facility in Aberdeen, doubling the group’s manufacturing capacity.
The facility will serve Duncan & Todd’s own retail stores as well as providing lenses to third-party opticians and laboratories. Following the latest investment, BGF remains a minority shareholder in the company.
Frances Duncan, managing director of Duncan & Todd, which was founded in 1973 and has grown to become one of Scotland’s largest independent optical chains, said the BGF funding had put the firm in a strong position to continue its expansion.
“We are very excited about the future. Having a material presence in the Central Belt with the strong brand name of 20:20 provides a great platform for the business to continue its expansion across Scotland. As well as the cash investment, BGF has offered advice to help us expand our manufacturing division.”
Patrick Graham from BGF, who has a place on Duncan & Todd’s board, said: “BGF is all about backing growing businesses and we saw that there was an opportunity in the optical market when we made our first investment at the end of 2013.
“Once we invest in a company we want to continue supporting management to grow their business so providing follow-on capital is a key part of our business model.
“This is an excellent investment for Frances Duncan and her team and will provide a significant step-change to the Duncan & Todd business.”
The transaction was initiated by DLA Piper Scotland which provided legal advice to the vendors, with Aequitas providing corporate finance advice. CMS Cameron McKenna and Haines Watts Corporate Finance provided advice to Duncan & Todd. Maclay Murray & Spens provided legal advice to BGF on the deal.
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING