Unlocking £70 million investment in sustainable modular homes with technical due diligence for TopHat

When an innovative business seeks new investors, robust technical due diligence is vital. Investors want advice that helps them understand each aspect of the business they’re considering buying into – and they want it quickly. This is exactly what we delivered for TopHat, who use advanced manufacturing to produce high-quality sustainable modular homes.

TopHat is taking modern methods of construction (MMC) to new levels, with super-efficient facilities producing low-carbon modular homes for rapid assembly on site. It’s an approach that can help the UK tackle its shortfall of around 100,000 new homes a year as the traditional construction industry struggles with a decline in both workforce and productivity.

Location

England, UK

As it scales up its operation, TopHat is opening Europe’s largest modular housing factory in Northamptonshire. From here it will manufacture up to 4,000 ultra-low-carbon homes a year using robotics and other advanced manufacturing techniques. When TopHat sought new shareholders to help finance their growth aspirations, it asked WSP to carry out the technical due diligence for investors, working to a tight deadline.

Received significant investment from new and existing shareholders

£70M £70M

TopHat’s finished product uses a tiny percentage of embodied carbon compared to a traditional home

3.704% 3.704%

Europe’s largest modular housing factory will manufacture thousands of new homes per year

4,000 4,000

The scale of the project

How do you get to the heart of a business like TopHat’s in just eight weeks and give investors all the details they need to know? We had to get to work quickly to examine every aspect of what the company does and how it does it. The scope was huge, including the:

Operational and manufacturing processes at its existing factory in Derbyshire
Scaling up of their processes for their new factory
MMC approach – including site assembly
Quality assurance both within the factory and on site
Performance of the homes it produces in comparison to their peers
Environmental, social and governance (ESG) credentials of the business
Commercial benchmarking against the market
Business structure and board-level responsibility

To cover all this, we knew we’d need environmental and ESG experts, two key areas for investors. We’d also need specialists in MMC, manufacturing and quality assurance to examine the factory processes and how modules are assembled on site. And we’d need experts who could carry out a benchmarking exercise to show investors how TopHat ranked against its peers from governance, technical, business and commercial perspectives. We didn’t have to look far – because WSP has all this expertise in house.

Having the right resources available at the right time was key to producing the report in the timescale required. We were able to bring together experts from different areas of WSP to create a report that identified any potential risks from an investor’s point of view.

Derek Sharkey Head of Client Strategy and Growth at Strategic Advisory, WSP

Through their single point of contact with us, TopHat received clear, consistent and regular communication as the report came together. Meanwhile, behind the scenes, our specialists held fortnightly touchpoint meetings. These enabled us to keep the report on track, iterate it as new information became available and ensure it always addressed risks from an investor’s point of view.

Why did we choose WSP? Blue chip investors respect their name, and they have the global network needed to support our longer-term aspirations. We particularly liked being able to access a range of expertise through a single point of contact. They got under the skin of the business, interrogating our data to create a thorough report.

Andrew Shepherd Managing Director, TopHat

Leveraging our experience of putting MMC innovation into action

Our MMC expertise embraces the full manufacturing and project lifecycle, across buildings and infrastructure. As well as helping innovators like TopHat unlock investment, we’re also innovators in our own right. On projects such as The Grange University Hospital, we’ve been at the heart of digital collaboration that pushed the possibilities of 3D design and off-site construction. This meant that TopHat could benefit from access to WSP specialists with in-depth expertise and extensive project experience of putting MMC into action.

With ESG considerations increasingly driving investment decisions, this area of our report was in sharp focus. Investors wanted this section separated so they could scrutinise it in detail. With in-house expertise in all areas of ESG, we were able to dive deeply into TopHat’s performance in this area. We were able to highlight the environmental performance of TopHat’s finished product, which has just 1/27^th (3.704%) of the embodied carbon of a traditional home. We showed that the business has strong governance in place. And we demonstrated its social impact – for example through its energy-efficient homes that keep bills low for occupiers and its factories that provide safe working environments for its employees.

Investment unlocked

In April 2023, TopHat announced that it had successfully raised £70 million from new and existing shareholders. FTSE-100 housebuilder Persimmon and institutional investor Aviva, through its Aviva Capital Partners unit, each made a substantial investment in the company. With the investment secured, TopHat is on course to complete its new factory and build more low-carbon homes to help ease the UK’s housing crisis.