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08 February 2004
Scotland on Sunday
Hamilton nets £3m gain with flotation
 
 
TYCOON John Boyle’s Hamilton Portfolio has emerged as one of the winners in Business Serve, an internet service provider that last week became the first to float in Britain since the dot.com era.

Boyle revealed that his investment vehicle pumped £3m into the Lancaster-based company four years ago. At last week’s flotation price of 78p, Hamilton’s 35% stake had doubled in value to £6.1m.

Business Serve, quoted on the Alternative Investment Market, employs 200 and serves more than 18,000 businesses with internet and telecommunications services, with a focus on the small and medium-sized enterprise sector. It is chaired by Lord Baker, the former Tory government minister. Andrew Lapping, managing director of Hamilton Portfolio, is a non-executive director.

Lapping said the deal was indicative of a resurgence of faith in the technology and ISP sector which was producing firms with better credentials than those at the time of the dot.com boom.

"We believe the company is well placed to continue its growth, mainly through acquisition, and feel very confident about its prospects," Lapping said.

Last November Hamilton led a consortium of investors that took a stake in Monstermob, a mobile phone entertainment content provider. Their initial investment of £500,000 rose in value to £5m.

Boyle, who launched Hamilton Portfolio in 1999 after making a personal fortune from the sale in 1998 of Direct Holidays to Airtours for £84m, said its investment in technology companies reflected changed circumstances.

"A lot of companies went to the wall [during the dot.com crash], not because they were bad, but because the money for investment had dried up. The circle has turned and people are now evaluating more realistically."

Hamilton, from being a niche Scottish player in the private equity and property investment sectors, has stepped up its game in recent months with a string of substantial transactions and as a result is becoming better known with an increasing spread of contacts and investments across Britain.

Boyle teamed up with ex-PricewaterhouseCoopers corporate finance and tax specialist Lapping to create a company that has acted as lead investor for a syndicate of wealthy individuals and entrepreneurs.

They were joined by Paul Johnston, a former Ernst & Young accountant who also worked with Scottish Enterprise and Sony Venture Capital Europe in Berlin, and Stewart Robertson, another former PWC corporate financier, who is also general manager of Motherwell Football Club, formerly owned by Boyle.

Hamilton has invested more than £200m in commercial and residential property, though the company has exited its commercial property interests."As soon as something becomes fashionable we get out," said Johnston, who is closely involved in many of the private equity and property investments.

On the private equity front, more than £30m has been invested in early-stage and more established companies, including the television production company Wark Clements. It has 14 private equity investments on its books and in each case it takes an active involvement in managing them. It normally takes a board position.

In late 2000 it joined Bank of Scotland and a number of other shareholders to form Northern Edge, a standalone investment company also chaired by Lord Baker.

Most recently, it has taken a renewed interest in the travel sector with the establishment of Go Travel Direct, a tour operator focusing on Caribbean holdings from Scotland, and flyZoom.com, an airline offering flights to five Canadian cities.

TERRY MURDEN
tmurden@scotlandonsunday.com


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