29th January 2020, 3:30 pm

LDC invested £365million nationally in 2019 including three deals in the North West

LDC, the UK’s leading mid-market private equity firm, said it would seek to increase its investment in companies in the North West during 2020. Last year, the firm deployed £365million of capital to back 18 ambitious management teams across the UK.

LDC, 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’. The firm said the plan formed part of its rolling three-year nationwide commitment to invest £1.2billion of capital, with the North West remaining a strategic focus for the investor.

In an annual summary of its performance, the firm – 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 saw LDC’s North West team invest £24million in Middlewich-based traffic equipment specialist SRL Traffic Systems to accelerate its organic growth. They provided a £20million investment in international environmental testing, inspection and consultancy business Shield Group to enhance its portfolio of services and support an international buy and build strategy. The team also backed MSQ Partners, one of the UK’s fastest-growing marcomms groups, in a deal that valued the business at around £37.5million.

In addition, the firm continued to support the growth of its portfolio with follow-on funding and expertise. In 2019, Fishawack, a healthcare communications company backed by LDC’s North West team, acquired US-based 2e Creative, which marked the business’ fourth investment in 12 months and further expanded its international footprint.

In the last 18 months, LDC-backed businesses across the UK have acquired more than 35 companies with a total enterprise value of over £220million.

For exits, LDC worked closely with management teams throughout 2019 to drive value despite tougher market conditions. Its North West team completed the sale of premium holiday cottage business Pure Cottages Group to Chester-based Sykes Holiday Cottages, the UK’s leading independent holiday home provider. LDC’s partnership with the firm, led by CEO Paul Liddell, supported an ambitious buy and build strategy which helped to treble its number of holiday homes from 500 to 1,500.

The team also sold its shareholding in Haydock-headquartered ATG Access, designers and manufacturers of high-security vehicle barriers, to Hill & Smith Holdings, in a deal that valued the business at £22.5million. Since the North West team’s initial investment in 2013, ATG expanded into multiple overseas markets, with exports accounting for 40 percent of total sales at the point of exit, with customers in more than 30 core markets worldwide.

LDC completed 11 exits nationally, which contributed to £330million of total proceeds during 2019. The management teams of these exited businesses achieved an average sales growth of 90 percent and grew employee numbers by almost 80 percent during their partnership with LDC.

Jonathan Bell, Head of LDC in the North West, said: “We have successfully partnered with management teams of growing business in the North West for 20 years, backing 18 businesses with more than £330million in the last five years alone. I continue to be impressed the resilience and determination to succeed that business leaders have across the region.

“We are committed to backing the future success of North West firms with our capital and expertise. It’s our job to ensure a good part of our national commitment to invest £1.2billion is deployed to support North West businesses.”

Martin Draper, Chief Executive of LDC, said: “We see growth prospects across all corners of the UK, and our market-leading regional presence means we’re on the ground, prepared to deploy more of our capital and unique expertise to help management teams capitalise on what is set to be a year of opportunity.”

In the North West, LDC has backed more than 65 management teams with more than £825million.

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 North West explore and launch their own business through start-up grants, volunteering and mentoring.

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