Sigma Technology and WL Ventures (with co-investment from the SCF) have invested £825,000 in Pentland Systems.
Pentland Systems has focused on a product niche in the military and defence markets, where it designs and manufactures analogue signal acquisition and reconstruction subsystems, for electronic sensor processing applications. These are used in complex radar, signal intelligence, and software radio systems in ground vehicles, ships, submarines, and aircraft. The systems convert analogue signals to digital then process them at high performance rates, and one of Pentland’s key competitive strengths is the ability to produce rugged systems for the very harsh environments encountered in battle conditions (temperature, vibration, etc). Recent customers include Lockheed Martin, Raytheon, Boeing, and Alenia Marconi.
The company was started in 1990 as an MBO by current managing director Steve Dunn and colleagues from Burr-Brown Systems Division (now part of Texas Instruments). The signal acquisition products were originally sold into industrial markets only. In the company’s early years PCs were able to take over this space thanks to the rapid increase in their performance, and Pentland Systems was forced to look for higher value applications. The company underwent a major re-organisation in 1998, and started to focus on the defence industry.
Pentland Systems is now developing a new range of hardware platforms (PCBs and other components) for software-defined radio (SDR) systems. This work has been started with the help of a SPURplus grant of £450,000, awarded in April last year, which is funding the development of a system for civil and commercial markets. The objective is to develop the technology to a point where potential customers can see its viability, with the final development undertaken as a customisation to meet specific client requirements. Pentland is aware of potential applications for SDR in the defence sector, and will be taking it to this market as soon as the technology is ready.
Since the reconstruction in 1998, Pentland Systems has had one significant financing round, in 2001 when equity finance was secured from Eastern Scotland Investments (ESI) and some private investors, including Martin Ritchie (chairman of the company since 1996). The ESI shareholding has been acquired by Sigma as part of the recently completed round. In this round, Sigma has invested £750,000 from its main fund (the Sigma Technology Venture Fund), WL Ventures has invested £50,000, and £25,000 from Scottish Enterprise’s Scottish Co-investment Fund. Graham Barnet of Sigma has joined the company’s board as non-executive director.
Although not available for the investment in Pentland Systems, Sigma is now itself able to bolster its investments with funds from the SCF, having announced the completion of a partnership arrangement with SCF at the end of May.