EDINBURGH-born entrepreneur Nick Hodgson has received backing from an international group of specialist investors to form Tinto Hill.
Tinto Hill has raised an initial £380,000 to search for a single, profitable Scottish business to acquire, with up to £50million then available to fund the acquisition.
The company will be Scotland’s first ever Search fund, an innovative approach to business acquisition. Search Funds differ from Private Equity as, once acquired, Nick will run the day-to-day operations of the business therefore creating a viable succession plan for business owners looking to retire.
Since their inception at Stanford University’s Graduate School of Business in 1984, more than 700 Search Funds have launched around the world, with their popularity often attributed to their high average internal rate of return (IRR) of 33.3 percent.
Tinto Hill’s search is industry-agnostic and is focused on the characteristics of these businesses. Key characteristics include;
- £1m and £5m EBITDA
- A fair valuation, with an enterprise value of up to £50m
- High-quality recurring cash flow
- A strong existing management team
- EBITDA margins of >15%
- Potential for growth.
Example target sectors include Energy Transition Services, Specialist Facilities Management, Testing, Inspection & Certification, IT Services, Education & Training, and SaaS.
Before founding Tinto Hill, Nick launched Deliveroo in Scotland and led global operations at start-up Airsorted – now known as Houst, the World’s biggest Airbnb manager. He has an Executive MBA, with distinction, from Warwick Business School.
Tinto Hill Director Nick Hodgson said: “Launching Scotland’s first-ever Search Fund is a hugely exciting project.”
“Scotland has a proud and extensive history of financial innovation and there is nowhere more appropriate to launch this new fund than in my home town.”
“Tinto Hill has secured funding to acquire a business with a value up to £50million, and the hunt is now on to find a firm that meets our requirements.”
“Scotland has a hugely diverse and vibrant business landscape, and Tinto Hill will look across all sectors and industries before making the right investment.”
