LDC to invest in 100 mid-market businesses over the next five years

LDC, the private equity arm of Lloyds Banking Group, is increasing its support of the UK’s mid-market through a new commitment to invest in at least 100 medium-sized businesses over the next five years. The pledge follows another standout year for LDC after investing more than £400m in 2021.

In its annual performance summary, LDC Chief Executive Toby Rougier, said its regional presence combined with deep sector experience had enabled the firm to increase its rate of investment.

LDC, which operates from 12 regional locations, backed 19 new management teams last year, despite continuing disruption caused by the Coronavirus pandemic.

Investments included British security systems manufacturer Texecom, specialist media sector IT provider Sohonet and healthcare business Kingswood.

It also provided additional capital to existing portfolio companies to complete 65 acquisitions, helping them to scale and diversify. This included the sixth bolt-on for mobile comms business Onecom since LDC invested and the third for water pump and pressure solutions business Stuart Turner.

LDC generated over £870m of proceeds from a total of 18 exits during the year with an average money multiple of 2.5x which it said underlined its value-adding approach.

Exits included SRL Traffic Systems, after supporting the business to more than double revenues through increasing its fleet and adding new depots; and healthcare communications consultancy Lucid which grew revenues by 145%. It said companies it sold on average had increased revenues by 64% and grew employee numbers by 60% during LDC’s partnership.

To support the private equity house’s commitment to invest in at least 100 new mid-market companies in the next five years, the firm made 20 new hires in 2021 and is continuing to recruit across its teams nationwide.

Commenting on LDC’s performance, Toby Rougier said: “Despite the ongoing challenges in many parts of the economy, our teams increased investment and support into mid-market companies across all the regions of the UK.

“As the UK looks to recovery and growth, this army of medium-sized companies will be critical. It is the backbone of British business and the engine room of our economy, teeming with talent and packed with potential. Given their ability to scale, these are the companies that, with the right support, can turbo-charge the recovery.”