News
LDC exits SRL Traffic Systems
6 Dec 2021
Leading mid-market private equity firm LDC has exited its investment in SRL Traffic Systems, the leading provider of portable and temporary traffic equipment, to 3i Infrastructure plc.
SRL is an equipment-as-a-service provider for temporary, portable and semi-permanent intelligent traffic lights and variable messaging signs (VMS). It supplies some of the UK’s biggest infrastructure projects from its nationwide network of 30 depots, primarily servicing the traffic management and events industries.
LDC backed the Cheshire-headquartered business in September 2019, investing £24million to support the management team’s ambitious growth strategy.
During the two-year partnership, SRL increased its fleet from 7,500 to almost 13,000 systems, added four new depots to its network, opened a new innovation and technical centre of excellence, increased its manufacturing capability and moved to a new combined manufacturing base and Head Office. The company also made a series of strategic hires, welcoming a new CFO, COO, CIO and product and technical teams to drive new product development and the rollout of new technologies.
SRL’s revenues have grown by 72 per cent, up from £18.4million in FY19 to £31.6million in the current financial year and headcount increased from 140 to 182.
The exit generates a 5.7x money multiple for LDC on its original investment and an internal rate of return of 124 per cent.
3i Infrastructure will now support the next phase of SRL’s growth, backing the incumbent management team and investing to support further expansion. Demand for SRL’s products continues to grow, as spending on roadworks, including highway maintenance, utilities works and major infrastructure projects, increases. In particular, hire of traffic management equipment is increasingly favoured over other traffic control methods due to the enhanced safety it provides to both workers and other road users, while still effectively managing congestion.
LDC’s support has helped us become market leaders in the traffic management space. We have invested significantly in our products, technology and people during our two-year partnership."
“We are now ready to embark on the next phase of our growth journey with 3i Infrastructure, as we consolidate our position at the forefront of innovation in intelligent transport systems and solutions.”
John Clarke, Investment Director at LDC in the North West, added: “Richard and his team have taken SRL from strength to strength, investing in every area of the business from talent and R&D to marketing and sales. And their success is plain to see, with a series of even more new product launches already on the horizon. We’re excited to see the business continue on its impressive trajectory in its new partnership.”
LDC was advised by Houlihan Lokey (Adam Sivner), Pinsent Masons (Amie Norris), CIL Management Consultants (Jon Whiteman) and EY LLP (Steven Kingham). Dealspan (Ged Gould and Chris Hurley) and DLA Piper UK LLP (Jonathan Watkins) provided advice to Management.