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LDC to increase investment in UK firms after deploying £365m in 2019
29 Jan 2020
LDC, the UK’s leading mid-market private equity firm, said it would seek to increase its investment in UK companies during 2020 after deploying £365million of capital in 2019 to back 18 ambitious management teams.
The firm, part of Lloyds Banking Group, said the role of private equity in supporting the UK’s small and medium-sized businesses was ‘more important than ever’. LDC said the plan formed part of its rolling three-year commitment to invest £1.2billion of capital.
In an annual summary of its performance, LDC – which typically invests between £5million and £100million in a single transaction – said every one of its seven UK regional teams invested last year, demonstrating the strength of the firm’s regional network.
2019 investments included precision engineering specialist ELE Advanced Technologies, business telecommunications firm Onecom and EMMY award-winning TV production company Plimsoll Productions.
In addition, the firm continued its focus on providing follow-on funding and expertise to support portfolio company acquisitions. In the last 18 months, LDC-backed businesses acquired more than 35 companies with a total enterprise value of over £220million.
This included its support of healthcare communications company Fishawack to expand its global footprint through an international buy and build strategy, helping Pure Cottages Group to grow its property portfolio nationally from 500 in the Lake District to 1,500 across the UK, and backing CIPHR to broaden its services through acquisition.
For exits, LDC worked closely with management teams throughout 2019 to drive value despite tougher market conditions. The firm completed 11 exits to either new investors or trade buyers including the sale of shareholdings in loudspeaker systems specialist Martin Audio to Focusrite plc, global events company FC Business Intelligence to Thomson Reuters and holiday provider Away Resorts to Bregal Freshstream, the latter seeing LDC reinvest for a minority shareholding. These contributed to £330million of total proceeds during 2019.
Of the companies exited in 2019, the management teams achieved an average sales growth of 90 percent and grew employee numbers by almost 80 percent during their partnership with LDC.
Martin Draper, Chief Executive of LDC, said: “The last 12 months have presented a unique set of challenges to UK businesses and management teams. And yet, despite this backdrop, opportunity and ambition have continued to shine through, and we’ve seen a strong performance across all of our regional teams and from the management teams we back.”
Every one of our regional teams invested in 2019 – showing the diversity of success across the UK’s business landscape and the importance of our on the ground presence from Aberdeen to Cardiff, via Leeds, Manchester, the Midlands, London and Reading."
“Despite the continuing challenging economic environment, we start 2020 with a renewed sense of optimism and confidence. With almost 40 years of experience behind us, a team of talented investors and a plan to invest £1.2billion in the next three years, our commitment remains undiminished. Combined with the continued support of our parent company Lloyds Banking Group and counsel from our partners in the advisory community, we stand ready, by the side of business, to play our part.”
LDC has backed more than 600 ambitious management since it was established in 1981, investing £1.8billion in the last five years alone.
The firm’s commitment to backing ambition extends beyond the mid-market. In 2019, LDC partnered with The Prince’s Trust to help young people across the UK explore and launch their own business through start-up grants, volunteering and mentoring.
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