The Yorkshire team of the UK’s leading mid-market private equity firm LDC completed transactions with a combined value of more than £470m in 2021.
In its annual performance summary, LDC, the private equity arm of Lloyds Banking Group, said it will increase its support for mid-market businesses across Yorkshire, underpinned by a commitment to invest in at least 100 medium-sized businesses nationally over the next five years.
In 2021, the Leeds-based team invested in Texecom, the leading manufacturer of electronic security products and services, to support the existing management team to develop new products and target complementary acquisitions.
The firm also exited successful partnerships with a number of businesses including Knaresborough-headquartered pest control product manufacturer Pelsis. LDC supported the business to complete major international acquisitions and boost global sales from €87m to €150m in just four years. It also exited steel framing provider Sigmat which created more than 100 jobs and grew revenues by 75 per cent over the five-year partnership with LDC.
In addition, LDC’s Yorkshire team helped its portfolio to grow through a series of ambitious buy-and-build strategies, including the acquisition of Thorn 3PL Services Ltd by Mosaic Fulfilment Solutions. The acquisition is enabling the business to roll out new products and expand its footprint across the North of England.
To support LDC’s commitment to increase investment in the region, the private equity firm recruited Will Scales as investment director in January 2021 and Anthony West as investment manager in November 2021. Both based in Leeds, Will Scales has more than a decade of experience working in corporate finance and spent eight years in the corporate finance team of Rothschild & Co, meanwhile Anthony joined from KPMG where he was a corporate finance manager for more than six years.
Dan Smith, partner and head of Yorkshire at LDC, said: “Business leaders across Yorkshire are as ambitious as ever and continue to identify new opportunities to grow. From speaking to the local business community, we know that management teams are now eager to push on with their growth plans but many could benefit from the additional support an experienced private equity partner provides.
“Yorkshire is an essential region for LDC, and we are committed to increasing our support for ambitious management teams to help them deliver on their growth ambitions in the coming year and beyond.”
Nationally, LDC backed 19 new management teams and invested more than £400m during 2021, despite continuing disruption caused by the Coronavirus pandemic. It also provided additional capital to existing portfolio companies to complete 65 acquisitions, helping them to scale and diversify.
Across the UK, LDC generated over £870m of proceeds from a total of 18 exits during the year with an average money multiple of 2.5x which it said underlined its value-adding approach. The companies it sold on average increased revenues by 64 per cent and grew employee numbers by 60 per cent during their partnership with LDC.
LDC chief executive Toby Rougier said: “Despite the ongoing challenges in many parts of the economy, our teams increased investment into mid-market companies across all the regions of the UK.
“As the UK looks to recovery and growth, this army of medium-sized companies will be critical. It is the backbone of British business and the engine room of our economy, teeming with talent and packed with potential. Given their ability to scale, these are the companies that, with the right support, can turbo-charge the recovery.”
LDC has also committed to ensuring its investment activity makes a meaningful contribution to the UK’s environmental and social challenges. The firm has pledged to ensure its own operations are net zero by 2030 and to support portfolio companies to reduce emissions by 50 per cent in the same timeframe.
LDC’s partnership with The Prince’s Trust – which helps young people across the UK explore and launch their own business through start-up grants, volunteering and mentoring – has supported more than 1,600 young entrepreneurs over the last three years.