Review of 2024 and look ahead to 2025 for East Midlands and East of England

As featured in Insider. 

How would you summarise 2024 in the East Midlands and East of England regions (specifically with regards to M&A and the opportunities for private equity)?

“2024 was a great year for LDC in the East Midlands and the East of England, and for dealmaking across the region, despite the challenges faced by businesses. We completed seven transactions valued at more than £200m.

“Whilst the uncertainty created by the UK and US elections, as well as the Autumn Budget, meant dealmaking was a bit more stop-start than usual, activity across the board picked up as the economic outlook began to settle and this created real momentum through the end of the year.

“The businesses that came to market were very impressive and boasted a good track record of growth. They also represented several sectors, from tech and healthcare to business services, industrials and food, which is thanks to the diversity of the business community across the region.

“A couple of highlights for LDC include our most recent investment in Mansfield-based Power Saving Solutions, where we’re actively supporting the management team to target further organic growth, and our exit of ENSEK, a leading provider of digital transformation services in the energy sector, to Centrica. ENSEK is a real regional success story and the growth CEO Jon Slade and his team have achieved is something to be commended.

“We’ve also helped our portfolio to grow through acquisitions. A good example of this is Bedfordshire-based water and environment sustainability specialist Stonbury, which acquired Panton McLeod earlier this year to support its UK expansion. Bolt-on acquisitions remain one of the most popular and effective routes to growth, as they allow businesses to scale quickly and take advantage of opportunities for growth throughout the economic cycle, and I expect this will continue. Given our ability to fund with follow-on capital, this is also a growth driver that businesses without private equity backing may find trickier.”

How do you expect the market to develop next year – specifically with regards to the outlook for M&A?

“The political and economic environment nationally has stabilised since the election and subsequent budget, and this is creating momentum. Businesses have more clarity around the measures they’re facing into and I expect this stability will fuel M&A activity in 2025, with an anticipation of falling interest rates also helping. That said our desire and ability to back ambitious management teams will remain just as strong regardless of the economic backdrop we face.”

What do you see as the key trends in 2025?

“The impact of AI will continue to gather pace in 2025. Every business needs to be tech-enabled and use data and AI where possible, to ensure they stay ahead of the pack. Conversely, businesses that don’t yet have a strong IT proposition will likely be less attractive to prospective investors.

“The same could be said about businesses with a meaningful ESG strategy. Those that can show progress and potential in this area, however, will continue to drive M&A activity. We want to invest in businesses like these – those whose products and services directly contribute to positive environmental or social outcomes are clearly more valuable. This will gather pace in 2025, as not only can we help those businesses to grow, but our partnerships can create long-term, sustainable impact.

“For us though, our ultimate goal remains – we are committed to backing businesses right across the region, from Derby to Milton Keynes to Norwich to Lincoln – that are headed by strong, growth-orientated management teams and which have a clear value proposition.”