Mercia AM: New £38m finance facility readies Mercia for M&A

Funding for growth. Mercia has secured a new three-year funding agreement with Metro Bank worth up to £38m, comprising a £13m term loan facility and a £25m revolving credit facility, strengthening balance sheet flexibility. Mercia-27 strategy. The facility supports delivery of the Mercia-27 plan, which targets growth in funds under management to £3.0bn, with strategic acquisitions expected to play an important role. Real assets opportunity. Management has highlighted the real assets sector as a potential acquisition focus, extending Mercia’s capabilities from funding SMEs and property developers towards funding asset ownership, supported by demand for affordable housing. Valuation unchanged. Following management’s comments that an acquisition during FY27 is a realistic possibility, forecasts are unchanged. We reiterate our sum-of-the-parts Fair Value of 54p per share.