LDC invests £437m in 23 UK firms in record year

  • Firm plans to invest £1.2billion over next three years
  • Management teams backed by LDC complete 25 bolt-on acquisitions in 2018
  • Companies exited in 2018 increased value by an average of 138% during partnership with LDC

LDC, the leading mid-market private equity firm, invested £437million of equity last year in 23 new deals, a record total for the business, driven by continuing demand for private equity from the UK’s medium-sized businesses.

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.

The firm said its activity highlighted the value of its regional model and the breadth of its appetite, spanning traditional buyouts, secondary buyouts, development capital investments and continued support for exited portfolio companies. To continue this, LDC is committed to investing £1.2billion in high-growth firms over the next three years (2019-2021).

2018 investments included the designer and manufacturer of premium high-performance loudspeaker systems Martin Audio, price comparison business Love Energy and Neilson Active Holidays.

In addition, LDC backed 25 UK and overseas acquisitions across its portfolio, with a combined enterprise value of £125million. This included its support of Scottish opticians Duncan & Todd and Yorkshire estate agency Linley & Simpson, which both completed four complementary acquisitions to expand their footprint in 2018. LDC also provided significant follow-on funding for healthcare communications specialist Fishawack to expand with the acquisition of US-based Blue Latitude Health and brand communications agency Healthcircle.

On exits, LDC said it had worked closely with management teams throughout 2018 to take advantage of favourable selling conditions with 26 divestments. Total proceeds generated reached £1billion with an average money multiple of 2.7 times.

LDC’s divestments included the sale of live entertainment business The NEC Group, the IPO of global games label and developer Team17 and the sale of one of the leading independent macro-economic research companies Capital Economics.

Alongside its investment and exit performance, LDC also provided a summary of its portfolio impact from 2018, confirming that companies it sold during 2018 had increased their enterprise value by an average of 138% during its partnership, grown sales by 79% and profit by 45%. Together, these 26 companies added a total of 2,784 roles to their teams, and with LDC’s support expanded into more than 25 countries and developed 50 new products or services.

Martin Draper, CEO of LDC, said: “Last year was another milestone year for LDC. Every one of LDC’s seven regional teams invested in 2018, showing at once the power of our unique regional model and the importance of our on the ground relationships. We invested across our range to support UK businesses in a diversity of sectors, situations and structures. And the growth of our portfolio companies demonstrates that private equity can help to sustain and create employment, drive international trade and innovation and positively contribute to the UK economy.

“Such a positive performance is the result of the collective effort of many people. It reflects the belief and determination of the management teams we back, the strength of our team’s expertise and energy, the counsel of our partners in the advisory market and the commitment of Lloyds Banking Group.

He added: “Despite the current political and economic uncertainty, our experience over more than 35 years has taught us that business leaders can go for growth and businesses can thrive at every point in the cycle. With £1.2billion to invest over the next three years, combined with the expertise of our team and flexibility of our model, we’re ready to support them.”

LDC, which has invested in over 600 firms since it was established, said it remained committed to its three-year investment pledge of £1.2billion for 2019-2021.

Read and Download The Year Ahead

Notes to Editors

  1. LDC is the private equity arm of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.  
  2. LDC backs ambitious management teams from UK-based medium sized companies seeking up to £100m of investment to fund management buyouts or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure, Support Services, Construction & Property and Financial Services.
  4. LDC has a UK regional network with locations in Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Newcastle, London, Manchester, Nottingham and Reading.