LDC sells £70m stake in West Midlands business

PRIVATE equity firm LDC in Birmingham has sold its stake in West Midlands based Cable Management Group (CMG) to an American corporation in a deal worth almost £70m ($110m).

CMG, which has operations in Coleshill and Newtown, is the UK market leader in the design, manufacture and supply of flexible conduit systems used in the protection of critical power and data cables.

The deal provides an excellent return for LDC, which took a significant majority stake in the business in January 2007.

CMG operates through three of the industry’s leading brands; Adaptaflex, Kopex and Harnessflex, within key vertical markets including industrial OEM, construction and infrastructure, petrochemical and transportation.

The deal represents synergy for Thomas & Betts as it is a global leader in the design and manufacture of essential components used to manage the connection, distribution, transmission and reliability of electrical power in industrial, construction and utility applications.

Headquartered in Memphis, Tennessee, Thomas & Betts has manufacturing and sales worldwide and reported revenues of US$1.9bn in 2009.

CMG, which employs 200 people, has achieved substantial organic sales and profit growth since 2007, with LDC working in partnership with a management team with extensive sector knowledge and operational expertise.

International expansion has taken place in the US, Europe, Australia and fast emerging economies in the Middle East, South America and Asia.

The original investment and ultimate exit from CMG was led by Martin Draper, managing director LDC Midlands and supported by Andy Lyndon, investment director. Mr Draper together with Darryl Eales, chief executive of LDC acted as LDC’s representatives on the board throughout the investment.

Mr Draper said: “In CMG we recognised the opportunity to partner with a high-quality management team and a business which had an internationally renowned reputation for high-quality and innovative products. Since our investment, CMG has consistently outperformed despite the challenging economic environment, consolidating its UK market position, leveraging its brands across new industry sectors and successfully expanding its presence in the US and other international territories.

“The sale to Thomas & Betts is an excellent outcome both for CMG’s employees and customers and we wish them all continued success in the future.”

Duncan McKinlay, chief executive of CMG commented: “The support and strategic input that we have received from LDC over the last three years has been invaluable. We established a close working relationship with the Midlands’ team at the time of the MBO and the business has benefitted significantly from their help in delivering our strategic objectives.”