April 25, 2017
BLUE BOX HEADLINE
‘THE GOVERNMENT HELPS PAY FOR YOUR INVESTMENT IN INNOVATION’
The MPA Group gives an assessment of Governments investment in innovation.
“Now is the time to innovate” says the latest CBI report on innovation.
The UK are only currently sitting at a R&D GDP spend of 1.7% well below our rivals with South Korea at 4.3%, Sweden at 3.3% and Germany at 2.9%. Both the UK public and private sectors are under-investing. As 2/3rds of the UK’s R&D is being carried out by business the need to help promote this expenditure is vital. So, businesses were pleased with the government’s commitment to an extra £2bn a year for R&D by 2020, with the decision to place science and innovation at the centre of the UK’s industrial strategy, and with the creation of the Industrial Strategy Challenge Fund (ISCF).
The Spring Budget….it seems like a long time ago
The Government’s commitment to supporting business investment in innovation was highlighted again by The Chancellor of the Exchequer, Philip Hammond in his 2017 Spring Budget.
Mike Price, Director, The MPA Group shares his thoughts on the 2017 UK Spring Budget for support to innovation and R&D.
Philip Hammond set out a generally upbeat summary focussing on a positive 2016 economic performance, which saw the UK positioned as the second-fastest growing economy in the G7. Growth forecasts from the Office of Budget Responsibility have been upgraded for this year and strong employment figures also provided good news.
Part of Hammond’s productivity message centred on the need to drive up the level of private investment in science, and to encourage research and innovation across the economy. This is where R&D Tax Credits will continue to play a pivotal role.
R&D Tax Credits – the future
As part of the Budget focus on taxation and business, the continued public commitment to the original objectives and current structure of the research and development tax credit scheme is very welcome.
For many SMEs and large organisations, their ability to claim up to 33% of their innovation costs under the scheme has enabled them to use welcome funds to further invest in staff, equipment and facilities, commercialise ideas, expand their enterprises and, ultimately, grow their businesses.
“Firms who introduce a new product to market have shown to grow jobs by 4.4% and grown turnover by 10% over the subsequent 3 years, compared to a non-innovator whose jobs increased by only 2% and turn over by 5.8%”
The need to clarify
The Chancellor stated that, after listening to businesses, the Government would be looking to make ‘administrative changes’ to the process that includes simplification for the scheme for large organisations, as well as aiming to improve awareness about R&D tax credits among SMEs.
“However, my view is that simplification is not enough, as it inevitably means change. Instead, striving to provide improved clarification around the scheme would be a much more important step forward, as it would help all stakeholders better understand how they can access and ultimately benefit from the funding. Let’s see what happens if the new Government has a strong mandate“
Mike Price, Director, The MPA Group
Increasing HMRC investment in publicising the scheme so that many more companies can benefit is excellent news. It will help to add to the 21,000 organisations out of five million who have already done so. They’ve enjoyed an average benefit of almost £100,000 each.
The Chancellor also pledged £570 million for disruptive technologies research, and funding for 1,000 PhDs and fellowships in scientific, technical, engineering and mathematics (STEM) subjects.
The funding, which will come from the Industrial Strategy Challenge Fund (ISCF), aims to put the UK at the leading edge of robotics, artificial intelligence (AI), biotechnology, battery technology and driverless vehicle systems. These are considered the technologies most likely to transform the UK economy in the coming years.
The Chancellor spoke of the need for technologies that could “operate in extreme and hazardous environments, including off-shore energy, nuclear energy, space and mining”, and of “accelerating patient access to new drugs and treatments through developing brand new medicine manufacturing technologies, helping to improve public health.” He allocated £270 million to fund this research.
A further £300 million was earmarked for training, attracting and retaining skilled researchers in subject areas that are aligned to the Government’s industrial strategy. Some £90 million of the money is destined for PhD places, £160 million for new fellowships, and £50 million for fellowships to attract researchers to the UK from “emerging research powerhouses like India, China, Brazil and Mexico”.
From MPA’s perspective, tangible support from government is vital if the UK is to lead the way in these emerging technologies. This welcome investment will help nurture the talent and skills the UK economy needs.
The MPA Group
The MPA Group is a team of highly experienced specialist industry analysts and expert accountants. MPA has worked in partnership with hundreds of SMEs to help them claim the tax relief of over £100m.
If your business is investing or has invested over the last two years in developing products, enhancing manufacturing processes, developing software or integrating solutions, The MPA Group can help you maximise your tax relief. To see how we could help you with this then please contact,
Samantha Wildman, R&D Advisor, on 01234 912000 or email Samantha.firstname.lastname@example.org.
“We were delighted with the services that Bluebox offered us. Bluebox’s attention to detail through their Diamond Programme ensured that we were well prepared for when the business was taken to market and that the sale process itself was managed expertly.
We challenged Bluebox with finding the right strategic buyer and thereafter negotiating a deal that met our requirements. In helping initially to identify and to secure the deal with Mountville Mills they accomplished just that. Communication throughout was excellent and professional, managing each stage of the process. I would have no hesitation in recommending Bluebox to any corporate shareholder or private business owner looking to divest their business.”
Richard Millward, Former Client
“We were delighted with the services that Bluebox offered us. Bluebox were challenged with finding us the right strategic investor and, thereafter, negotiating a deal that met our complex requirements. In identifying and securing the deal with LGC they have done exactly that. The process itself was efficient and smooth, largely due to the excellent communication from the Bluebox team, who also demonstrated excellent experience at managing a very engaging auction process. I would be delighted to recommend Bluebox to any corporate shareholder or private business owner looking to divest a business.”
Helen Dickinson, Former Client
It has been a real privilege working with the team at Bluebox over this last year or so. Bluebox’s attention to detail ensured that we were well prepared for when the business was taken to market and the sale process itself was managed expertly. Starting the process, I had no idea exactly what this would entail and the volume of work that has been produced by everyone and the result reached today is nothing short of brilliant.
Hugh Morris, Former Client
We are delighted with the services that Bluebox was able to offer. They showed an intimate knowledge of a deal cycle, managed a tight auction process and were highly communicative from the start. I would happily recommend Paul and his team to business owners contemplating a sale of their business in the next 24 months. Experience is key and this has paid off for us.
Laurence Seward, Former Client
Aligning ourselves early with Bluebox, and entrusting the team to guide us through their process proved to be a highly rewarding investment from all viewpoints. Bluebox’s support significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years. The earlier the engagement the better so far as I am concerned.
Mike Minett, Former Client
We began working with Bluebox in early 2015 through their Blue Diamond Programme, as we were contemplating an exit. We found that the process focussed our minds on the key areas of growth in the business, and prepared us well for the inevitable rigours of due diligence. During the sale process itself, the advice offered by the Bluebox team was invaluable. We found them to be helpful, straightforward and honest.
David Stokes, Former Client
When selecting our adviser, it was extremely important that they had access to international buyers and were experienced in cross-border M&A. The team at Bluebox proved to be invaluable by identifying a strategic acquirer from America who was not known to us and by negotiating an excellent deal for all parties. I was also impressed with the process management from Bluebox, which ensured that the deal was closed in a timely fashion.
Jeff Weinstein, Former Client
When I first engaged with Bluebox, I was hesitant as to the benefits of using an advisor to firstly, find a buyer for my business and secondly, to get a deal over the line. However, now that the deal has completed with KPM, I can honestly say that the finer negotiation points handled by Bluebox and their overall management of this process has been nothing short of first class. I would be delighted to recommend Bluebox’s services to any entrepreneur contemplating the sale of their business.
Bill Ballard, Former Client
Bluebox worked closely with us over the following six months and helped us to implement some key initiatives which made InferMed a more attractive acquisition target. Once we decided to sell the business, the Bluebox team were very diligent in ensuring that no stone was left unturned. They negotiated expertly on our behalf to ensure we got the best deal possible.
Alan Montgomery, Former Client
The pre-sale planning programme that we signed up for with Bluebox made us develop our strategies and focus on the bigger picture. It proved to be a very rewarding investment from all viewpoints and significantly enhanced both the value of our business and its ‘saleability’. I would highly recommend Bluebox to business owners contemplating an exit in the next two years.
Nigel Parsons, Former Client
I have experienced first hand the value that can be created through highly structured pre-sale planning. It amazes me that it is not something that everyone does. It is so disappointing to see around 90% of transactions collapse before they complete and pre-sale planning will not only enhance your price, but also significantly enhance your chance of a closed deal.
James Caan, Investor
We worked incredibly closely with our advisers who provided expert knowledge of the sale process with which we were not familiar. We were truly delighted with the results.
Marten Nielson, Former Client
We appointed advisers to manage the sales process after we had received a number of unsolicited approaches for the business. I was incredibly impressed by the immense value that could be created by expertly negotiating with a group of already interested parties.
Paul Duckworth, Former Client
I was delighted with the service that the team offered and their real attention to detail. The deal was not without its complexities and it was reassuring to have such experienced advisers assisting me throughout the negotiations.
Peter Bennett, Former Client
Truly delighted with the way my sale process was managed. The fact that the team I worked with achieved such a great multiple is testament to their experience and their ability to create some true competitive tension.
James Averdieck, Gü, Former Client
The team at Bluebox provided invaluable support in negotiating this complex transaction. Their access to international purchasers, and exceptional knowledge of cross border M&A ensured that the deal was concluded efficiently, achieving a highly successful outcome for us all.
Jon Parslow, Former Client
“We selected Bluebox after a fairly long round of evaluating potential advisors because of their scientific, yet challenging approach to maximising value. During our initial meetings they showed us how far short of “ready” we were and consequently we completed more preparation in the early stages which meant we were equipped for what was to come. We were delighted with our choice of Corporate Finance partner. I do not hesitate in recommending Bluebox for any SME to consider.”
Simon English, Former Client
Bluebox provided invaluable advice in managing the negotiations with incoming investors. Their skills in handling these discussions were evident from the outset and the vital interface that they provided between the incumbent team and the incoming investors was truly beneficial.
Henry Braham, Former Client
Bluebox have a professional, dynamic and experienced team that is greatly assisting me with my focus on my exit within the next 24 months. Their structured approach is very refreshing and their ‘Blue Diamond’ programme is adding immense value.
Matt Evans, Former Client
The team at Bluebox provided me with a seamless service from the start of the engagement until our deal was completed. Attention to detail was commendable and their understanding of corporate M&A very impressive. I could not recommend them highly enough.
Victor Lewis, Former client
Having tried to sell my business previously – and failed – I was only too aware of the importance of pre-sale planning. This is a talented team offering a service that most people find out about, but too late.
Simon Hulme, Former Client
Bluebox are a quality outfit. Their access to International acquirers and relationships with the highest quality domestic investors was impressive. My shareholders and I received excellent service from start to finish and it was refreshing to be dealing with a senior team throughout the sale exercise.
Michael Clapper, Former Client
I cannot recommend the team at Bluebox highly enough. Their expert guidance throughout the entire sale exercise resulted in my shareholders securing an excellent deal with which the entire team was delighted.
Mark Rodol, Former Client
I’m really pleased with the service Bluebox provided. The team demonstrated excellent knowledge of the process to follow and led negotiations for the hospital in a way that allowed us to ensure we received appropriate value whilst focusing on reputational risk. Communication and service were of a very high standard.
Steven Davies, Former Client
With Bluebox’s expert advice we were able to find the right buyer that will benefit our business strategically. We’re delighted with the outcome and look forward to starting our new chapter
Clive Hillier, Former Client
The advice offered by the Bluebox team throughout the process was invaluable to the shareholders. We strongly believe that participating in Bluebox’s pre-sale planning programme was a significant driver behind the success of the deal. Their project management and negotiation skills throughout the sale process itself resulted in an exceptional deal being delivered to all parties involved.
Harpal Singh, Former Client