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BUILDING VALUE

  • >1/3 LDC’s current portfolio on a buy and build strategy
  • 25 portfolio acquisitions supported in 2018
  • £125m total enterprise value of acquisitions
  • 20% of acquisitions were international

Buy and build has proved one of the most effective ways for private equity funding to drive the growth of a business. When done properly, we know that making complementary acquisitions can create real opportunities to help a management team realise their long-term vision and add significant value.

It’s why over a third of our current portfolio businesses are deploying acquisition-based strategies. And, more importantly, many of them are delivering these strategies at pace.

In 2018 alone we continued to back the management teams of our portfolio as they made 25 acquisitions with a total enterprise value of over £125million. These acquisitions supported a number of growth strategies from accelerating regional or international expansion, increasing scale or diversification of products and services.

Regionally, we moved quickly to help the management team of Yorkshire-based residential sales and lettings company Linley & Simpson enhance its foothold in the county, adding four complementary businesses in the first six months of our partnership. Similarly, we supported leading Scottish optometrist Duncan & Todd to consolidate its market leading position in Scotland, adding five new retail outlets to its business in 2018.

Yorkshire letting agency Linley & Simpson completed the acquisition of Dale Eddison in November 2018, its fifth acquisition since LDC investment five months earlier.
Yorkshire letting agency Linley & Simpson completed the acquisition of Dale Eddison in November 2018, its fourth acquisition since LDC investment six months earlier.

Looking overseas, we also provided follow on funding for international bolt-ons. Pelsis, Europe’s leading manufacturer of branded pest control products, expanded to the US through its acquisition of Curtis Gilmore which created a group with €125million in revenues. In addition, LDC supported ZyroFisher’s acquisition of Royal Velo in France. The deal marked the first acquisition for the UK’s leading cycling parts and accessories distributor and will enable the team to accelerate growth in Europe.

To increase scale across the UK, we worked in partnership with the management team of babble cloud, one of the UK’s leading cloud-based communications technology companies. We supported babble’s acquisition of Birmingham-based Arden Group to strengthen its portfolio and double its industry footprint.

Activity in 2018 builds on LDC’s buy and build heritage. We supported global electronics testing group Microlease’s acquisition of six new businesses over a ten year period; helped gas and chemical distribution specialist A-Gas acquire six new firms overseas; and assisted international professional services provider Equiom complete more than 20 acquisitions since 2013. In every case, LDC backed the management team and worked alongside them to identify, acquire and - where appropriate - integrate complementary businesses to accelerate the growth of their firms.

LDC’s appetite to back the acquisitive growth plans of its portfolio management teams is stronger than ever. Being part of Lloyds Banking Group, we have a track record of providing a reliable source of follow on funding. We also have a history of investing through the economic cycle to help firms take advantage of more competitively priced opportunities, accelerating their growth journeys even during slower economic periods.

The Year Ahead