The private equity investment process

Ambitious management teams are always looking to take their business to the next level.  But sometimes, there’s a need for investment or additional expertise.

At LDC, we know the measurable difference the right private equity partner can make to help a business grow. It’s why we’re committed to backing ambitious management teams to deliver their growth plans.

The results speak for themselves. In 2018 alone, the companies we sold more than doubled their value during their partnership with us, growing total sales by an average of 79%. Together, these 26 companies added a total of 2,784 new roles to their teams, and with LDC’s support expanded into more than 25 countries, developed 50 new products or services and acquired 44 complementary businesses.

On the surface, securing private equity investment can seem like a daunting and drawn-out process, especially if you’ve not involved an investment partner before. There are consultants, accountants, banks, and legal experts to engage along the journey, in addition to a number of options for the management team to consider ahead of finalising that all-important investment.

No matter who you ask, every deal is different. However, there are a number of common stages in the way that LDC works when it comes to the deal process:

1.    Developing our understanding

We’ll meet and will work with you to understand your business, objectives and aspirations. At the same time, you’ll get to know the people that would support your business through the lifecycle of our partnership, how we work and our relevant experience. We see this relationship building as critical to future success, helping us all agree whether we’re the right partner to support your growth journey and, if we are, helping us shape what our offer looks like.

2.    Offer letter

If we both feel we’re a good fit, we carefully consider how to structure an attractive deal that will deliver the best results for you and LDC. This will be discussed and we then formalise by sharing an offer letter for you to consider.

3.    Due diligence

If you accept our offer, we work together with external advisors to complete a more formal due diligence process on your company and the market you operate in, to substantiate our positive view and identify future opportunities to create value.

4.    Refining the business plan

Our investment professionals work with you to help you refine your business plan and objectives based on the insights from the due diligence. This creates an aligned growth strategy so we’re ready to hit the ground running once the investment process concludes.

5.    Legal documentation

Whilst the due diligence is being completed, and the business plan agreed, both of our legal partners will work together to draft the formal legal agreements for the investment.

6.    Signing the deal

We reach the final agreement on the deal structure and financials. The legal documentation is signed and the deal is completed. Welcome to the LDC portfolio!

7.    100 day plan

After the celebrations, you’re ready to press on with your growth plans. One or two of the team you’ve worked with during the process will join your board as non-exec directors. And you’ll have access to all the benefits of being part of the LDC portfolio, including support from our Value Creation Partners, a dedicated team of industry professionals with deep sector and functional experience.