£40m Wales Business Succession Fund launched to support management buyouts
£40m Wales Business Succession Fund launched to support management buyouts
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A new £40 million Wales Business Succession Fund has been launched by the Development Bank of Wales to help management teams acquire businesses, safeguarding jobs and ensuring companies remain under Welsh ownership.
Backed by the Welsh Government and the Clwyd Pension Fund, the fund offers structured equity and debt packages of between £500,000 and £5 million with repayment terms of up to seven years. It is forecast to support more than 1,000 jobs across Wales and follows the £25 million Wales Management Succession Fund, which will close this year after supporting 26 buyouts and safeguarding over 700 jobs since 2019.
First Minister Eluned Morgan said the fund would play a vital role in keeping businesses anchored in their local communities. She said: “The Wales Business Succession Fund was established to keep ownership of businesses in Wales, by supporting management teams to buyout owner managers either looking to retire or realise a return from their equity stakes.
“I’m delighted the Development Bank will use this new £40 million fund to get behind succession deals, which play a key role in keeping businesses rooted in their local communities. Our joint investment alongside the Clwyd Pension Fund will create more opportunities, unlock new growth potential and support the next generation of business owners in Wales.”
The first investment under the new scheme is a £5 million package for Dragon Recycling Solutions Limited (Dragon RS), enabling a management buyout of the Tredegar-based company and securing 120 skilled jobs.
The deal marks the third time the Development Bank has supported Dragon since 2016. It comprises £2.25 million of equity from the Wales Business Succession Fund and £2.75 million of debt from the Wales Flexible Investment Fund.
Dragon RS processes around three million smart meters each year under nationwide contracts with major energy suppliers. The buyout team consists of four directors, three of whom are women, with Beth Bysouth appointed Managing Director alongside Operations Director Gerard Howard, Financial Controller Mikiko Minty, and Compliance Director Tracy Medlicott. Mark Pulman will join as Chair.
Beth Bysouth said the fast-changing energy landscape presents strong growth opportunities:
She said: “The smart meter market continues to expand rapidly, driven by technological upgrades and evolving energy infrastructure. With the phase-out of 2G and 3G networks, legacy meters must be replaced with 4G/5G-compatible models, and the natural degradation of lithium thionyl chloride batteries means replacements are inevitable. Add to that higher repair rates and incompatibility across energy providers, and the opportunity for Dragon RS has never been clearer.
“Our specialist services such as Use Case 4 processing and LTC battery recycling have already garnered strong interest, and we’re excited to expand our triage, repair and recycling services in order to consolidate our market position and reinforce our commitment to sustainability.
“We’re thrilled to be taking Dragon RS into its next chapter. The support from the Development Bank of Wales has been transformational—not just financially but in the belief they’ve shown in our vision, team, and potential. Their backing gives us the confidence and resources to push boundaries, grow sustainably, and continue creating skilled jobs here in Tredegar.”
Giles Thorley, Chief Executive of the Development Bank of Wales, added: “With the backing of Welsh Government and the Clwyd Pension Fund as an institutional investor, the new Wales Business Succession Fund will build on the legacy of the Wales Management Succession Fund by supporting economic growth and safeguarding jobs in Wales.
“Dragon RS is a standout Welsh business rooted in Tredegar with a strong commitment to sustainability and innovation. It’s precisely the kind of business that we’re proud to support.”
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