LDC, THE UK’s leading mid-market private equity firm, said it would seek to increase its investment in UK companies during 2020, with Scotland being a strategic focus for the investor. Last year, the firm deployed £365million of capital to back 18 ambitious management teams across the UK.
LDC, part of Lloyds Banking Group, said the role of private equity in supporting the UK’s small and medium-sized businesses was ‘more important than ever’. The firm said the plan formed part of its rolling three-year commitment to invest £1.2billion of capital across the UK.
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, demonstrating the strength of the firm’s regional network.
LDC’s 2019 investments included Edinburgh-headquartered telecommunications and ISP provider Commsworld. LDC backed the business to help its existing management team build on the firm’s recent success and bring its super-fast and resilient connectivity to more organisations across the country.
In addition, LDC continued to support the growth of its portfolio, providing follow-on funding and expertise to drive acquisitions. Since investing in optician and hearing chain Duncan & Todd, the business has acquired seven practices, with the addition of a further nine from Blacks & Lizars in April 2019. It now operates 41 practices across Scotland, with revenues increasing by 15 percent to £19million in its latest financial year.
In the last 18 months, LDC-backed businesses across the UK have acquired more than 35 companies with a total enterprise value of over £220million.
For exits, LDC worked closely with management teams throughout 2019 to drive value despite tougher market conditions. Its Scotland team completed the sale of its shareholding in CMS Window Systems in 2019. During its three-year partnership with LDC, the business opened an 8,500sq ft manufacturing and recycling facility and increased the capacity of its Cumbernauld headquarters which resulted in revenues increasing by 25 percent to almost £40million.
LDC completed 11 exits nationally which contributed to £330million of total proceeds during 2019. The management teams of these exited businesses achieved an average sales growth of 90 percent and grew employee numbers by almost 80 percent during their partnership with LDC.
Mark Kerr, Head of LDC in Scotland, said: “We have invested over £100million to support the growth ambitions of Scottish management teams in the last seven years. Having locations in Aberdeen, Edinburgh and Glasgow means we’re in tune with each local business community and on hand to identify and support those management teams with bold plans for the future. Backed by our UK-wide £1.2billion investment plan, our team is determined to help firms across Scotland achieve their growth strategies and build on their successes to date.”
Martin Draper, Chief Executive of LDC, said: “We see growth prospects across all corners of the UK, and our market-leading regional presence means we’re on the ground, prepared to deploy more of our capital and unique expertise to help management teams capitalise on what is set to be a year of opportunity.”
LDC’s commitment to backing ambition extends beyond the mid-market. In 2019, LDC partnered with The Prince’s Trust to help young people across Scotland explore and launch their own business through start-up grants, volunteering and mentoring.