LDC's relationship with the UK’s largest independent privately-owned vehicle management group Leasedrive has evolved considerably since we first backed the business in 2008.
Established in 1983, Leasedrive provides a full range of services including fleet management, contract hire plus short and mid-term vehicle rentals, and is differentiated by its high level of bespoke customer service complemented by industry-leading technology. The business also boasts an impressive roster of blue-chip clients including PwC, British American Tobacco, Samsung, Countrywide, John Lewis Partnership and Capita.
From day one, we focused on backing Leasedrive’s experienced and proven management team and supporting their efforts to expand the business’ contract hire customer base. Sourcing strategic acquisitions, with the intention of consolidating the fragmented leasing sector, was also a priority.
In December 2010, the business completed its acquisition of Masterlease UK, in partnership with Investec. With our support, management successfully integrated the two businesses, with the vast majority of key accounts – 18 of the top 20 customers, transferring to the enlarged group. This transformational deal epitomised the advantages of market consolidation, with Leasedrive’s EBIT doubling from £5m in 2010 to £10m in 2011.
While acquisitive growth was a core part of our strategy, we also helped to implement a number of initiatives to drive underlying organic growth at Leasedrive, including an increasingly structured approach to lead generation and pipeline management, coupled with addition of new talent into the sales team, which has since yielded strong results.
As part of the boost to sales and profit growth, which saw revenues increase by 52 per cent during our investment to £116m and operating profit reach £14m, up from around £5m, during the same timeframe, Leasedrive secured a major new contract with Mercedes Benz Financial Services UK (MBFS). The German car manufacturer appointed Leasedrive to provide fleet management for its multi-marque contract hire proposition, Daimler Fleet Management.
Although the business was faced with challenging economic conditions during our tenure, it performed extremely well; growing market share, securing significant new contracts with key blue-chip corporates and completing a high-quality and strategic acquisition in Masterlease.
In December 2013, we sold our majority stake in Leasedrive and then subsequently re-invested in the business, retaining an interest as part of a new deal with HgCapital, which acquired the controlling stake.
Overall, the deal demonstrated the perseverance of our investment teams to back management teams through challenging trading conditions and see a business through to exit. The sale process required strong corporate finance skills and patience to get the best deal over the line for the business and set it up for its next period of growth.
Peter Opperman, previously Non-Executive Chairman, Leasedrive Said: “LDC played a fantastic role over the five year period they were invested in Leasedrive. Relationships with the management team were excellent despite the difficult times after Lehman’s, it really was a partnership of the investors in the business. The LDC role in the acquisition of Masterlease showed how private equity can enable organisations to move faster than conventionally backed companies.”
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by Sophie Reed