ANNEX A
NWBF001 – Procurement of Legal Services Framework Agreement – Information Note
1.1Background Information
North West Business Finance Limited (NWBF) has been established to oversee the delivery of the Venture Capital Loan Fund (VCLF) under the Joint European Resources for Micro to Medium Enterprises Initiative (JEREMIE) in the North West of England.
The JEREMIE initiative offers EU Member States, through their national or regional Managing Authorities, the opportunity to use part of their European Union (EU) Structural Funds to finance small and medium-sized enterprises (SMEs) by means of equity, loans or guarantees, through a revolving umbrella fund. The initiative was developed by the European Commission (EC) and the European Investment Fund (EIF), which is part of the European Investment Bank (EIB) Group.
JEREMIE provides for a range of debt and equity financial tools to obtain the most appropriate allocation of funds according to national, regional or local requirements.
The NW VCLF is funded by a European Regional Development Fund grant under the 2007-13 programme and is matched equally by private sector loan funding from the European Investment Bank (EIB).The North West fund will run for an initial investment period up to the end of December 2015.
The North West Fund is a £185m evergreen investment fund established to provide debt and equity funding from £50,000 to £2 million to small and medium sized enterprises (SMEs*) based in, or relocating to, the North West of England.
The Fund comprises of six specific funds, each of which is managed by a Fund Management company appointed by NWBF. The fund managers will invest the capital over the next five years in eligible small to medium enterprises (SMEs) from early stage through to development and expansion.
1.2The Requirement
This procurement is for the establishment of a framework agreement of suitably qualified suppliers to provide specialist legal services, where required, including drafting investment and funding contracts between the NW fund managers listed below and SME’s, who have been approved to receive investment.
In addition we require Potential Providers to review intellectual property issues arising in respect of investments to SME’s and to advise on employment issues which arise in connection with SME’s.
Potential Providers will need to advise on the transactional documentation which is involved in making an investment to an SME’s which will have, or intend to have, intellectual property rights and Potential Providers will be expected to advise the funds on all matters relating to intellectual property.
Finally, Potential Providers will advise on employment matters which arise when acting for a fund which is making an investment to businesses where employees are key to that investment and also where there may be employment related issues such as restrictive covenants.
Although the number of suppliers is not fixed at this stage it is intended to appoint between 5 and a maximum of 20 suppliers onto the framework.
Being selected as a framework supplier does not guarantee the award of any individual contracts under the Framework Agreement.
It is anticipated that between 50-100 investments are likely to be made over the next 12 month period, however this figure is for information only and the NWBF cannot guarantee this or any business.
It should be noted that the Framework is being available for the fund managers to use, it is not mandatory that the Fund Managers use the Framework.
Division into LOTS
The service will be divided into Lots and suppliers may bid for one or more Lots and as a result may be taken forward to the ITT stage for one or more Lots.
Lot 1 – Drafting of investment contracts together with advising on associated legal services
Lot 2 – Intellectual property advice in respect of the issues arising when investing in SME’s which hold or will hold intellectual property rights.
Lot 3 – Employment law advice in respect of employment issues arising at SME level.
The services will be called off under the framework by NWBF and the 6 Fund managers named below:
The services are to be provided predominantly in the North West Region of England, including Merseyside, Cumbria, Lancashire, Greater Manchester and Cheshire.
The six funds that comprise The North West Fund are:
1)Venture Capital Fund £30m administered by EV Group
The Venture Fund is for start-ups and early-stage businesses under £1m turnover. The emphasis for this fund is on backing entrepreneurs who can demonstrate a flair for business. This fund operates across all sectors including technology and knowledge-based businesses (outside those targeted by the specific priority sector funds).
The Venture Fund provides risk capital and can include a combination of equity and loan support.
2) Development Capital Fund, £45m Administered by YFM Group Ltd
Development Capital fund comprises investment capital to support business expansion in circumstances where a business is already generating trading income and cash flow.
It has a broad sector range, outside those targeted by the specific priority sector funds, but with an emphasis and focus on the regional economic priority sectors including advanced engineering and materials, food and drink and business and professional services and also businesses with strong export potential.
The fund comprises a combination of equity, quasi-equity or mezzanine capital and loans (linked to equity).
3) Business Loan Fund, £35m, administered by FW Capital Ltd.
Business Loan Fund is aimed at those businesses that can demonstrate a strong case for investment; which includes business plans to show growth and ability to service a loan.
Loans can typically be repaid over 3.5 to 5 years.
Security, such as business assets or personal guarantees may be required.
The following 3 funds are focused on priority sectors and will provide both venture capital and development capital.
4) Energy & Environmental Fund, £20m administered by CTIP
This sector includes companies involved in cleaner fuel production; electricity or heat generation; transportation of heat and electricity; end use of energy in transport, industry and the built environment; water and waste water treatment and recycling and waste management.
This fund provides investment into, amongst other things, technology businesses, services or consultancy companies and renewable projects. It is anticipated that businesses will typically have some commercial demonstration of the technology used.
Combination of equity, quasi-equity or mezzanine capital and loans (linked to equity).
5) Biomedical Fund, £25m administered by SPARK Impact
This fund provides a flexible equity package for growth orientated businesses operating within the sector.
This sector includes companies involved in pharmaceuticals (research, development and manufacture of drugs and biopharmaceuticals); biotechnology; diagnostics; clinical research organisations; contract manufacturing organisations; analytical services and sciences; and healthcare technologies and medical devices.
Combination of equity, quasi-equity or loans (linked to equity).
6) Digital & Creative , £15m administered by AXM
This fund provides a flexible equity package for growth oriented businesses operating within the sector.
The sectorincludes companies involved in advertising; architecture; arts & antiques; crafts; design; designer fashion; digital and ICT; music; publishing; radio and television; software; computer games and electronic publishing; video; film and photography; and visual and performing arts.
Combination of equity, quasi-equity or mezzanine capital and loans (linked to equity).
1.3 Framework Agreement
The successful provider(s) shall be admitted to a Framework Agreement. The call off element of the Framework Agreement shall be activated when a fund Manager or NWBF raises a call off order (each call off order being a contract in its own right). Any specific requirements for any Fund Manager or NWBF shall be set out in the call off order.
In the event that several providers have been admitted to a framework agreement the Fund Managers and or NWBF, may need to hold a mini competition with providers for the provision of any call off order if they are not capable of identifying the most suitable provider to meet their requirements.
It is anticipated that the Framework Agreement will be 4 years in duration.
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