Private Equity’s hunger for deals grows

John Garner

Private equity is increasingly seen as the route for growth for ambitious businesses and investors are showing a growing appetite to get deals done.

Leading mid-market private equity investor LDC has Yorkshire firmly in its sights when it comes to growth.

In July LDC revealed it remained a strategic region in its nationwide pledge to invest £1.2bn over the next three years to support the growth ambitions of small and mid-sized businesses.

The firm said it had seen record activity in Yorkshire and the North East over the last 12 months, following the completion of five investments, two exits and three portfolio acquisitions, driven by continued demand for private equity support from businesses across the region.

The team completed five new investments totalling more than £100m. They included backing Knaresborough-based Pelsis in a multi-million-pound deal, a £31.8m investment in NBS, the commercial arm of the Royal Institute of British Architects (RIBA), and a £10m investment in the Leeds-based property agency Linley & Simpson.

The firm also backed the secondary buyout of Leeds-headquartered transport management software developer Mandata in a £20m deal to accelerate its organic growth.

John Garner, director and head of LDC in Yorkshire and the North East, said: “Local firms led by ambitious management teams remain the backbone of the UK business landscape, and it’s positive to see that continued planning, collaboration and strategic investments have allowed the regional economy to thrive.

“The level of activity we’ve seen so far this year is a clear indication of the appetite for investment and there’s no doubt businesses across the region are hungry for growth.”

Over the same period, the team partially exited its 2016 investment in Wakefield-headquartered Team17 following its £217m listing on London’s AIM market. The IPO raised proceeds of £107.5m and generated strong returns for LDC.

Garner said: “Despite operating against a backdrop of political and economic uncertainty, the management teams we support have continued to push on, implement their expansion strategies and drive growth.

“This determination is the key to success, but with the support of a private equity partner, businesses have an opportunity to further unlock potential and accelerate growth.

“We see a unique opportunity here and are excited to continue our support of the region’s growth ambitions throughout 2018.”

Since opening its doors in 1989, LDC has invested more than £500m to back management teams across Yorkshire and the North East.

Leeds-based Reward Finance Group has received £10m investment from an independent infrastructure and private equity investment firm.

Foresight Group confirmed the additional funding, which Reward says will be used to help fulfil the growing demand by SMEs for its business finance, trade finance and invoice finance products.

The latest investment by Foresight came 11 months after providing Reward Finance with £40m, which enabled it to double its lending capability.

Nick Smith of Reward said: “An increasing number of companies are turning to asset-backed funders like Reward Finance.

“With the extra funding we will be able to quickly meet the growing demand for our finance products across the North of England, through our Leeds and Manchester offices.”