Intense Photonics Raises £10.5 Million ($16 M) From New Investor Consortium
Source/Type: Company News Releases

August 22, 2002... High Blantyre, Scotland
Intense Photonics, a fast emerging developer of innovative integrated optical components has announced that it has closed a £10.5 million ($16 m) series B funding round. Cazenove Private Equity leads the round with a syndicate containing first round investors, 3i and ACT Venture Capital, together with two further European venture capital funds, FNI Venture Capital and TTP Ventures.

Intense Photonics will use the funds to accelerate the development of its product range and strengthen its marketing effort.

Commenting on the scale of the fundraising David Lockwood, CEO of Intense Photonics said "against almost all planning scenarios this exceptional funding achievement sees the company through to the generation of positive free cash flow."

Tod Bensen, CEO of Cazenove Private Equity was confident that the syndicate had identified the right investment despite the current turmoil in the sector. "We have followed the progress of Intense Photonics for some 18 months and have seen it develop considerably over this period. The company has a first class management team that is dedicated to extracting value from its unique technology. The many current and potential applications of Intense Photonics quantum well intermixing techniques have given us the confidence to invest in the Company at a time when most photonics companies are struggling and market visibility remains poor."

Robin Winning of 3i's Technology Team said: "The difficulties in the technology capital markets have tended to conceal the fact that there are many sound businesses developing technology with a global application. Intense Photonics is one such business, which is reflected by the overall scale of 3i's investment in the Company and the fact that we have supported it from start-up. The business has considerable long term potential and we look forward to working with and adding value to the management team as they pursue their growth strategy."

"A great result, reflecting the excellent capability of the team, technology and products", added John O' Sullivan of ACT Venture Capital.

Intense Photonics has a fully operational semiconductor fabrication facility and produces multi-function optical chips. These multi-function chips provide significant cost advantages for telecommunication and other systems vendors through the reduction in component count, and enable the creation of completely new functionality. Developing such components in conjunction with the systems houses requires significant capital equipment and several design iterations. The financial strength of the company will enable such developments to be undertaken with confidence.

Intense Photonics holds the intellectual property rights to QWI (Quantum Well Intermixing) component processing techniques initially developed for over a decade at the University of Glasgow. The innovative company has received a SPUR Plus award from the Scottish Executive and has been awarded a Regional Selective Assistance (RSA) grant.

Robert Crawford of Scottish Enterprise welcomed the commitment and confidence placed in one of Scotland's dynamic new enterprises and commented, "I am delighted that a Scottish based company in this high value knowledge intensive business has secured such broad support from a wide range of European investors. This is a reflection of the growing reputation we have in Scotland for the skills and innovation we have in the optoelectronics sector."


About Intense Photonics
Intense uses a proprietary development and manufacturing technique known as Quantum Well Intermixing (QWI). QWI allows multiple optical functions such as lasers and amplifiers to be fabricated on a chip in a single processing stage. Intense Photonics has raised a total of £10 million / $15.3 million prior to this round in the form of series A finance from 3i and ACT Venture Capital, venture leasing from European Venture Partners and grants from the Scottish Executive. In June 2001 Intense Photonics acquired 100% of the share capital of Du Pont Photo Masks (UK) Ltd for the purpose of obtaining a facility in Hamilton in Scotland that includes a Class 1 clean room.

About Cazenove Private Equity
Cazenove Private Equity (CPE) is a division of Cazenove Group plc, a leading independent investment bank. CPE was established in April 2000 with the objective of producing superior returns for its investors. Its first fund, the Cazenove New Europe Access Fund (CNEAF), raised £234 million from a combination of leading European institutional investors and Cazenove itself. CNEAF invests in unquoted companies in the UK and continental Europe in the technology, media, telecommunications and Internet sectors. The focus is on second and third round pre-IPO financings and the fund seeks to be a partner of choice for both leading European technology companies and their early stage investors.

Cazenove is regulated in the UK by the Financial Services Authority and is a member of the London Stock Exchange.

About 3i
3i brings capital, knowledge and connections to the creation and development of businesses around the world. It invests in a wide range of opportunities from start-ups to buy-outs and buy-ins, focusing on businesses with high growth potential and strong management. 3i Invests in businesses across three continents through local investment teams in Europe, Asia Pacific and the USA. To date, 3i has invested over £14.5 billion (including co-investment funds). In the 12 months to 31 March 2002, an average of £4.1 million (including co-investment funds) was invested each working day. In the 12 months to 31 March, 3i invested £548m (including co-investment funds) in 361 technology businesses. 3i makes technology investments in a broad range of sectors including Communications, Healthcare and Software & Internet. The portfolio includes businesses at all stages of development. At 31 March 2002, 3i's technology portfolio was valued at £1.7 billion and included over 800 businesses.

About ACT
ACT Venture Capital is Ireland's leading independent venture capital company with over EUR350m under management through a number of venture capital funds. Founded as an independent operation in 1994, ACT has completed over 45 investments principally in technology-based companies serving global markets. Our portfolio consists of a significant number of technology investments across software, communications and Internet technology as well as the more traditional development capital and buyout investments. ACT has a strong executive staff that can apply a diverse range of international, industrial, technology and financial experience to achieving success for the companies we back.


FOR FURTHER DETAILS PLEASE CONTACT:

Barrie Nicholson
Wordsun
Tel: +44 (0)1258 840999
barrie@wordsun.com

Jim Ashe, VP Sales and Marketing
Intense Photonics Ltd
Hamilton International Technology Park
High Blantyre G72 0UX
Scotland
Tel: +44 (0)1698 827000;
Fax: +44 (0)1698 827262
enquiries@intensephotonics.com

Wordsun Limited
The Old Post Office
Gaunts Common
Wimborne
Dorset
BH21 4JN
UK
+44 1258 840999

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