The Bristol office of LDC, the UK’s leading mid-market private equity firm, is to increase its support to businesses this year after completing transactions with a combined value of more than £280m in 2021.
LDC, the private equity arm of Lloyds Banking Group, said it is aiming to invest in at least 100 medium-sized businesses nationally over the next five years – and is targeting firms across the South West and Wales.
Last year the LDC team – which also has an office in Cardiff – invested in Bristol-based digital media company Hybrid and Sohonet, a leading London-based international provider of connectivity, collaboration software, media services and network security for the media and entertainment industry.
It also exited its successful four-and-a-half-year partnership with Stonehouse, Gloucestershire-headquartered water-based heating systems specialist ADEY.
Following LDC’s investment in June 2016, ADEY went on to develop new products, strengthen its commercial water-testing service through its acquisition of Alpha Scientific, add additional sites, and open a purpose-built manufacturing and distribution facility – growing net revenues from £34m to £51m in the process.
In addition, LDC helped its portfolio companies to grow through a series of acquisitions, including supporting Herefordshire-based HSL Compliance, an SGI company, to acquire Albany Oak, an established water and effluent treatment specialist based in Llanelli.
The transaction expands SGI’s services into industrial water treatment.
LDC also supported Zip World to launch its fourth adventure destination, the multi million-pound Zip World Tower in South Wales.
LDC partner and head of South West and Wales, Dewi Hughes, pictured, said: “The team’s activity during the last 12 months is testament to the strength and resilience of management teams based in the South West and Wales that are continuing to target growth.
“As we enter 2022, we are confident and enthused about the prospects for mid-market firms in the region.
“We are committed to increasing our support for these businesses to help them to bring their ambitions to life.”
Nationally, LDC backed 19 new management teams and invested more than £400m during 2021, despite continuing disruption caused by the pandemic.
It also provided additional capital to existing portfolio companies to complete 65 acquisitions, helping them 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% and grew employee numbers by 60% 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 and support 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% 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 in the last three years.
