LDC boosts manufacturing investment target to £300m

PRIVATE equity firm LDC has announced that it has increased its new investment funding commitment to specialist engineering and manufacturing businesses to £300m.

After announcing an initial commitment of £200m to the sector in October 2011, LDC has since completed 11 new investment transactions into manufacturing and specialist engineering businesses, placing total equity funding of more than £190m.

Following this success, the private equity firm will now look to invest an additional £100m more than its original target.

The £300m commitment will continue to focus on mid-market UK businesses in the £10m to £150m enterprise value range and, typically those with specialist manufacturing capability in niche sectors such as aerospace and power generation, which have featured strongly in the commitment to date.

Joe Farren, investment director at LDC in Yorkshire and the North East, who is leading the initiative in the region, said: “Having successfully invested more than £190m of new funding into specialist engineering and manufacturing businesses in the first 18 months of this initiative, we have decided to further increase our commitment to the sector by taking our investment target to £300m.

“Our initial investment initiative to back high quality manufacturing and specialist engineering businesses has been incredibly successful, but we believe that there is a great deal more potential to support businesses in this sector so we have decided to uplift this funding in order that more companies can benefit.”

As part of its investment strategy, LDC frequently provides additional capital for acquisitions or to drive organic growth, and much of its national portfolio has received follow-on funding.

Under the commitment LDC has completed investments in 11 manufacturing and engineering businesses.

In Yorkshire and the North East, LDC backed the buyout of Scarborough-based Dale Power Solutions in August 2012, and supported the 2011 management buyout of Benson Group, one of the UK’s largest manufacturers of printed folding carton and sleeve packaging with sites in Newcastle, Gateshead and Crewe.

Farren added: “By increasing our commitment to invest £300m of new capital to this important industry sector, LDC is reiterating its commitment to, and on-going confidence in, UK manufacturing.

“LDC’s network of offices across the UK ensures that we are able to effectively tap into the richness of the manufacturing environment in numerous sub regions. This increase in funding will give LDC’s regional teams greater scope to explore investment opportunities with fast growing manufacturing and specialist engineering businesses and we hope more management teams will consider the benefits that partnering with a private equity investor like LDC can bring.”