An ambitious North East HR firm has secured a second round of investment from NPIF II – NEL Smaller Loans, which is managed by NEL Fund Managers as part of the Northern Powerhouse Investment Fund II (NPIF II). The strategic six figure sum will complete the acquisition of Manchester-based Heads HR Limited, and to refine its marketing strategy to accelerate expansion.
Sapphire HR, which provides comprehensive HR solutions designed to alleviate the stress of HR management for small business owners, received the first round of investment in December 2024. Since then, the business has recruited two new HR advisers and significantly grown its client base.
This new investment played a pivotal role in the recent acquisition of Heads HR Limited, allowing the business to accelerate its next phase of growth in the education sector and unlock new opportunities across the UK to develop specialist teams within primary care, social care, NHS and education.
The investment is also supporting Sapphire HR’s continued partnership with Team Valley Group, to implement an integrated marketing strategy as the business expands into new sectors, ensuring clear and competitive positioning within the marketplace, and aligning key messaging to strengthen brand impact.
Sapphire HR was introduced to NEL Fund Managers by Michael Cantwell, Corporate Finance Partner at Clive Owen LLP, who oversaw the transaction alongside Craig Malarkey, Partner at Swinburne Maddison LLP . They were supported by Joe Vera-Sanso, Corporate Finance Executive, and Sophie Ayre, Corporate Associate Solicitor, working closely with Susan Snowdon, NEL Investment Executive, to deliver the deal successfully.
Susan commented: “As a previous investee, I was delighted to work with Michael and the team again and continue our strategic partnership. With this new investment, the business is well positioned to drive sustainable revenue growth, and I wish them all the best.”
Michael Dobson, Founder and Managing Director at Sapphire HR, added: “I’m delighted to have worked with the teams at NEL Fund Managers, Clive Owen and Swinburne Maddison on this funding round. The unfailing support and guidance throughout the process have been invaluable, enabling us to realise our growth ambitions, and expand by acquiring another specialist team to provide HR Services to the Education Sector and Schools across the Country from this team’s base in Manchester.”
“The team at Heads HR have built a loyal client base over the last 10+ years and we look forward to working closely with the team over the coming months as the business moves forward with this exciting new chapter. This acquisition positions us to capitalise on the significant opportunities ahead as we continue to strengthen as a business and deliver HR solutions to a UK-wide client-base.”
Sarah Newbould, Senior Investment Manager at the British Business Bank said: “Having initially supported Sapphire HR at the end of 2024, we’re proud to see NEL providing further funding to this ambitious business through NPIF II. NPIF II is committed to backing businesses throughout their growth journey, allowing them to pursue new opportunities. It’s investments like this that can help to broaden a business’s reach, unlock new markets, create high-quality jobs and, ultimately, build a stronger Northern economy.”
Craig Malarkey, Partner at Swinburne Maddison LLP, said: “We were pleased to support Sapphire HR on this second NPIF II investment and the acquisition of Heads HR. It’s a strong endorsement of the business’s strategy and growth ambitions and positions the team well for their next phase of expansion. It’s been a pleasure working with Michael and the wider advisers, and we wish him and the Sapphire HR team every success going forward.”
Joe Vera-Sanso, Executive, Corporate Finance at Clive Owen LLP said: “As a longstanding client of Clive Owen LLP, we were delighted to support Michael in delivering this latest acquisition as part of Sapphire HR’s growth journey. It was an exciting transaction to be involved in, and its success was due to collaborating closely with fellow advisers and the expertise of all the professionals involved. The successful acquisition of Heads HR positions Sapphire strongly for continued growth and expansion, and we wish Michael and his team every success.”
Operated by British Business Bank, the £660m Northern Powerhouse Investment Fund II covers the entire North and provides loans from £25k to £2m and equity investment up to £5m to help a range of small and medium sized businesses to start up, scale up or stay ahead.
The purpose of the Northern Powerhouse Investment Fund II is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North. The Northern Powerhouse Investment Fund II will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.
NEL Fund Managers are also managing NPIF II – NEL Debt Finance which offers Debt Finance from £100,000 to £2m to established businesses looking to realise their growth potential.
For more information about NEL, please visit www.nel.co.uk or contact the investment team on 0345 369 7007.