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Investing 'through the cycle'is key to success.

Byline: Martin Draper

2011 was another year of concern and uncertainty for the Midlands dealmaker community, as the combination of slow economic growth in the UK and the prospect of further austerity measures continued to take their toll on business confidence. However, despite this on-going scepticism, there were clear pockets of growth in the economy and here in the Midlands deal activity remained high both in terms of value and volume, as mid-market businesses continued to attract investment interest. Martin Draper, UK New Business Managing Director for leading private equity provider LDC reflects back on another busy and successful year for the Midlands team.

Despite the ongoing challenges surrounding economic recovery, it is fair to say that deal activity in the Midlands held up very well during 2011, with private equity helping to ensure that M&A transactions in our region didn't fully succumb to bearish sentiment.

While private equity providers have had to adapt their investment criteria to suit the challenging climate, LDC's strategy of investing 'through the cycle' along with our unique ability to balance sector knowledge, regional coverage, portfolio breadth and range of deal types - from pounds 2million to pounds 100million equity investments - forms the backbone of our ability to complete deals.

LDC invested over pounds 370million nationally across 18 new investments in 2011. Of this, the Midlands team committed more than pounds 90million of equity in six transactions. In addition we transacted four 'buy and build' acquisitions, out of a national total of seven, to support the growth strategies of the existing Midlands portfolio.

Our first new investment of 2011 took place in February, when we completed a significant investment into Kee Safety, a leading global safety business which specialises in the manufacture of fall protection equipment and is headquartered in Meriden. The transaction saw us backing the incumbent management team to support the business in its rollout of new products, further expansion into international markets and future acquisitions.

The business is performing well and in October 2011, we supported Kee Safety's acquisition of Easi-Dec Access Systems, a UK supplier of access equipment for safe working at height. Easi-Dec has a product range that complements Kee Safety's existing portfolio, and has brought additional innovative product design and manufacturing skills to the business.

July was an incredibly busy month for LDC Midlands as we completed two new investments into leading beauty accessories supplier Original Additions, as well as Angel Springs, one of the UK's leading water cooler service providers.

A significant player in the beauty accessories market for more than 30 years, selling branded eyelashes, nails and professional beauty products, Original Additions' core brands include Eylure, Elegant Touch and Salon System.

Following a ground-breaking collaboration with Girls Aloud through the Eylure brand of false eyelashes, Original Additions is now looking to drive both UK and international growth in the business and has recently announced the launch of a Katy Perry by Eylure product range designed specifically to target consumers in the all-important US market.

Our investment into Wolverhamptonbased Angel Springs was in support of the management team's buy and build strategy, targeting complimentary businesses to increase market penetration and expand the existing customer base in what is a highly fragmented market. So far, we have supported the business in its completion of three acquisitions; investing in the Fillongley Spring Water bottling plant in August 2011, the acquisition of the entire water cooler base of Water at Work Limited in November 2011 and most recently, the Aqua Domus water cooler portfolio in January 2012.

LDC's announcement in October 2011 that it would commit pounds 200million of new investment capital to support specialist engineering and manufacturing businesses demonstrates our continuing confidence in UK manufacturing.

For LDC, specialist engineering and manufacturing remains one of the UK's most dynamic industry sectors as we have seen so many UK businesses proving resilient through the recent economic downturn and benefitting from demand from emerging economies. Although we are a multi-sector private equity investor, this arena is a core area for LDC and one in which we are particularly keen to invest.

The end of the 2011 didn't show any signs of slowing down for LDC's Midlands' team. December was a busy month as we completed two new investments in quick succession; PJD and Benson Box; both of which were transacted using capital from this pounds 200million specialist engineering & manufacturing commitment.

PJD Group, based in Castle Donington, is one of the UK's leading independent mechanical engineering specialists and provides a wide range of repair, maintenance, manufacturing, upgrade and installation services across the power, environmental and industrial markets. The business is well placed to deliver strong growth and we are now looking to target strategic acquisitions to help accelerate the company's prospects in existing and new market sectors.

Benson Group is the UK market leader in the supply of printed folding carton board packaging to the food retail sector, and in the healthcare market, the business manufactures cartons, patient information leaflets and labels for pharmaceutical customers in the UK and Europe. Originally established in the 1920s by the Benson family, the business has grown considerably over recent years following a mix of strategic acquisitions, organic growth and substantial investment into all of its manufacturing facilities. We are now working closely with management to identify acquisition opportunities in order to help accelerate growth.

The LDC Midlands investment portfolio consists of 22 companies, with a combined turnover in excess of pounds 1.5billion and over 6,000 employees. Throughout 2011, we absolutely maintained our commitment to support the growth plans of mid-market businesses and we have carried the momentum into 2012. So far this year, we have already completed three new deals investing pounds 60million of equity, which includes our investment in Pertemps Network Group, the UK's largest independent provider of specialist outsourced recruitment services and the MBO of Airline Services, a leading provider of aircraft ramp turnaround and cabin retrofit services to airlines in the UK and overseas.

Going forward throughout 2012 and beyond, we hope to encourage more management teams to consider the benefits and growth opportunities that partnering with a private equity investor like LDC can bring.


Martin Draper, UK New Business Managing Director for leading private equity provider LDC
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Title Annotation:Features
Publication:The Birmingham Post (England)
Article Type:Company overview
Date:Mar 29, 2012
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