ldc march presentation
TRANSCRIPT
LDC Private Equity briefing in conjunction with DED
16th March 2017
2017/18 – the Isle of Man
Government’s focus:
Strategic Objectives
“Enterprise & Opportunity Island”
DED Enterprise Initiatives include : -
• Online “Toolkit”
• Micro grants
• Small Business support
• Marketing Support
• Financial Assistance Schemes
• Employer Assistance Scheme
• Training Grants
And the “Enterprise
Development Scheme”
The £50 million Enterprise Development Scheme, was launched in April 2016.
Here for ON – ISLAND BUSINESSES !!
Scheme Design
The scheme is divided into 3 core parts
• Fledgling To include ‘Micro’ & ‘Small’ Grants.
• AcceleratorTo provide Loan & Equity support to SME’s entering next growth phase.
• RelocatorTo invest in larger businesses entering the ‘commercialisation’ stage.
EDS Campaign
My Enterprise campaign featured in local media and accompanying
videos appeared online
Summary
• Enterprise Development Scheme launched April 2016
• SPARK Impact appointed to manage the Scheme
• Strong pipeline of circa 90 leads already
• First deals to be announced soon!
Introduction to LDC
• CHIEF MINISTER SLIDE
Fuelling Growth with LDC
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LDC context & background
Driving Growth Together
- What Private Equity look for
- Making it happen – examples
Cautionary Note
Summary call to arms
I PLAN TO COVER
ABOUT LDC
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BACKGROUND TO LDC
Scale & Experience
Most active investor
Backing management teams
Flexible Funding structure
Breadth of investment
Actively adding value
Coverage Team & appetite
Portfolio scale & potential
Track Record of Success
Private Equity Arm of Lloyds Banking Group
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Management teams
Growth Potential Point of difference
Established Profits.
Track record Ways we can add value
OUR INVESTMENT CRITERIA
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The commitment to supercharge growth through buy & build, organic or international expansion strategies and follow-on funding.
Our scale and history means we have valuable sector experience to call on; though you know your business best.
We are well connected locally which means we can facilitate introductions and help your business succeed.
Our value enhancement team looks to help business outperform and increase shareholder value.
LDC has a network of hundreds of high-calibre, trusted Non-Executive Directors who bring years of industry expertise.
The synergies in our portfolio mean they often become customers of each other and share knowledge.
ADDING VALUE
LDC ADDS VALUE TO ITS PORTFOLIO COMPANIES IN A NUMBER OF WAYS
INVESTMENTS
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TRANSACTIONS: 2016 DEALS
THE PALLET NETWORK
EQUITY <£15MRE-INVESTMENTSUPPORT SERVICES
ZYRO-FISHER
EQUITY £15M - £30MMANAGEMENT BUYOUTRETAIL & CONSUMER
GIACOM
EQUITY <£15MMANAGEMENT BUYOUTTMT
CIPHR
EQUITY <£15MMANAGEMENT BUYOUTTMT
BYBOX
EQUITY £30M - £50MMANAGEMENT BUYOUTTMT
CUTS ICE
EQUITY <£15MDEVELOPMENT CAPITALRETAIL & CONSUMER
CITYSPRINT
EQUITY £30M - £50MSECONDARY BUYOUTSUPPORT SERVICES
VITAL INGREDIENT
EQUITY <£15M,MANAGEMENT BUYOUTRETAIL & CONSUMER
CMS WINDOW SYSTEMS
EQUITY <£15MMANAGEMENT BUYOUTCONSTRUCTION & PROPERTY
ADEY
EQUITY £30M - £50MMANAGEMENT BUYOUTINDUSTRIALS
TEAM17
EQUITY £16.5MDEVELOPMENT CAPITALTMT
PAW HOLDINGS
EQUITY £15M - £30MMANAGEMENT BUYOUTCONSTRUCTION
PANTHER LOGISTICS
EQUITY <£15MMANAGEMENT BUYOUTSUPPORT SERVICES
TXM PLANT
EQUITY £15M - £30MMANAGEMENT BUYOUTINDUSTRIALS
MAGICARD
EQUITY <£15MMANAGEMENT BUYOUTTMT
APPLIED COMPOSITES
EQUITY <£15MDEVELOPMENT CAPITALINDUSTRIALS
ELLIS WHITTAM
EQUITY <£15MDEVELOPMENT CAPITALSUPPORT SERVICES
MITREFINCH
EQUITY £20M+MANAGEMENT BUYOUTTMT
IN 2016 LDC INVESTED £330M IN DEALS ACROSS A VARIETY OF SECTORS, DEAL SIZES AND EQUITY STAKES.
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TRANSACTIONS: 2017 DEALS
AWAY RESORTS
EQUITY <£5M
LDC provided additional capital for the acquisition of Sandy Balls Holliday Village, creating a group valued at £100m.
ACQUISITIONTRAVEL & LESIURE
RUSH
EQUITY £16.5M
Rush secured a £16m minority investment from LDC to support a national rollout programme.
MANAGEMENT BUYOUTRETAIL & CONSUMER
CHARGEPOINT
EQUITY £15M - £30M
ChargePoint secured investment to drive further international expansion and invest in development of new products.
MANAGEMENT BUYOUTHEALTHCARE
SO FAR IN 2017, LDC HAS INVESTED OVER £85M IN DEALS ACROSS A VARIETY OF SECTORS, DEAL SIZES AND EQUITY STAKES.
FISHAWACK
EQUITY £15M - £30M
LDC alongside the management team acquired Fishawack in a deal that values the business at £38m.
MANAGEMENT BUYOUTHEALTHCARE
BLUE BAY TRAVEL
EQUITY £6.5M
Blue Bay Travel secured a £6.5m investment from LDC to accelerate growth.
DEV CAPTRAVEL & LESIURE
NODE4
EQUITY £15M - £30M
LDC re-invested in Node4 to further support the business’ fast growth strategy.
DEV CAPTMT
DRIVING GROWTH TOGETHER
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An opportunity to invest
Alignment with the teams they partner
with
Ability to work together to create
shareholder value and then realise it
WHAT PRIVATE EQUITY ARE LOOKING FOR….
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Shareholder value is created through
- Profit growth
- Cash generation
- PE Arbitrage
CREATING SHAREHOLDER VALUE….
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BUY & BUILD
Enabling a business to acquire complementary businesses either vertically or horizontally within an industry.
ORGANIC GROWTH
Through new contract wins, roll-out, product or service developments, new facilities and entering into new sectors or areas of business.
INTERNATIONAL EXPANSION
Expanding the international reach of business either trough acquisition, partnership of
PRIVATE EQUITY AS A CATALYST FOR GROWTH
Every company's growth story is different, but three common categories include:
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• Using capital to maximise the organic plan
• Roll-out
• New contract wins
• Product or service developments
• New facilities
• Entering into new sectors or areas of business.
ORGANIC GROWTH
MINISTRY OF CAKE
2015 - 2016
Supporting organic growth via new product lines and factory acquisition increased sales to >£30m.
EQUITY <£15MRETAIL & CONSUMER
FOREST HOLIDAYS
2012
Follow on funding to support new sites and accommodation.
EQUITY £15M - £30MTRAVEL & LEISURE
PENN PHARMA
2007 - 2014
Additional funding for a new manufacturing facility and investment in new technology.
EQUITY £30M - £50MHEALTHCARE
VYSIONICS
2011 - 2014
Investment in new products helped turnover grow from £9.3m to £16m in 12 months.
EQUITY <£15MSUPPORT SERVICES
BIFOLD GROUP
2012 - 2015
Supported Bifold’s move into a new 30,000 sq. ft. manufacturing facility.
EQUITY £30M - £50MINDUSTRIALS
JOULES
2013
Between 2013 and 2015 revenues increased by 50% driven by 37 new stores and e-commerce.
EQUITY £22MRETAIL & CONSUMER
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Website
Deal
Year
Employee
sTurnover
EBITDA
RUSH
• A leading Hair & Beauty Brand
• 85 salons, L’Oreal is a strategic partner
Partnered with LDC in 2017
• Supporting UK national roll-out
• Technology to enhance the customer experience
• Brand & Product Opportunities
www.rush.co.uk
Management Buyout
2017
700
£30m - £100m
£4m
ORGANIC GROWTH - RUSH
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LDC is an expert in helping supercharge the growth of UK-based businesses internationally in all parts of the world, having helped companies across all sectors; from retail to healthcare and technology.
INTERNATIONAL EXPANSION
MICROLEASE
2006 -2017
During LDC’s 10-year tenure, international revenues at Microlease increased from £9m to £92m (900%).
EQUITY <£15MTMT
SYNEXUS
2015 - 2016
Acquisition to enter the US market and new research centres in Bulgaria, Poland and Romania.
EQUITY £30M - £50MHEALTHCARE
ATG ACCESS
2013
Secured new contracts at home and abroad including: in China, Amsterdam, Oslo and Doha.
EQUITY <£15MINDUSTRIALS
JOULES
2013
Increased international revenues by 198% over a three year period.
EQUITY £22MRETAIL & CONSUMER
SEABROOK
2015
Supported Seabrook’s first international deal in the Middle East as part of a major export drive.
EQUITY £15M - £30MRETAIL & CONSUMER
EDM
2011
Topped Sunday Times international Track 200 having grown international sales by 247% a year.
EQUITY £50M -£100MSUPPORT SERVICES
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Website
Deal
Year
Employee
sTurnover
EBITDA
EDM
• International Information Management Specialist
• Original LDC support in 2011
• 8 acquisitions including in US – an acquisition which doubled the size of the business
• Topped 2016 Sunday Times International Track 200
• Grown international sales has supported profit growth from £1m in 2011 to £15m today
www.edmgroup.com
Management Buyout
2011
1000
£30m - £100m
£10m - £20m
INTERNATIONAL - EDM
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In the last five years, LDC has invested more than £150million in follow on funding to support the acquisition strategies of 27 portfolio companies.
BUY & BUILD
EDM
2010
Seven strategic acquisitions which have seen the company double in size.
EQUITY £50M -£100MSUPPORT SERVICES
CITYSPRINT
2016
LDC has supported five acquisitions in the first six months of our partnership.
EQUITY £30M - £50MSUPPORT SERVICES
INPROVA GROUP
2014
Acquired two domestic energy businesses, as part of plans to double the size of the business over the next three years.
EQUITY <£15MSUPPORT SERVICES
A-GAS
2011
£30m of follow-on funding to back six international acquisitions creating a 47% increase in revenues.
EQUITY £50M -£100MINDUSTRIALS
EQUIOM
2013
With support from LDC, ten acquisitions have helped to increase the business’ revenues by 400%.
EQUITY £15M - £30MFINANCIAL SERVICES
NODE4
2013
Node4 activated a strategic buy & build strategy that saw the business complete three acquisitions .
EQUITY £15M - £30MTMT
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Website
Deal
Year
Employee
sTurnover
EBITDA
MICROLEASE
• £30m MBO of global electronic testing group in 2006
• LDC supported
• 6 acquisitions including Metric Test in US
• New facility in Malaysia
• By 2017
• 10x increase in revenues
• Profits grow to £35m ebitda
• £240m sale to US hq’d Electro-Rent
www.microlease.com
Management Buy-Out
2006
260
£100m+
£35m
BUY & BUILD - MICROLEASE
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Challenges to successful investment completion
- Hockeystick forecasts - credibility
- Alignment with the investor (management &
owners)
- Who is buying with us?
- Price & process
- Trading through processes – momentum
- Poor processes & misalignment can kill deals
Build relationships early, reference and share the
ambition
A CAUTIONARY NOTEWHERE IT CAN GO WRONG?
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1.Private Equity can power growth and
value
2.Partnering with ambitious and capable
management teams
3.What is the real potential for your
business & ambition?
4.Build relationships early – alignment and
trust
5.Reference – style, capability &
behaviour
6.Always consider the potential – we are
always happy to talk..
SUMMARY
Jonathan Caswellt:07764 625267 e:[email protected]
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IMPORTANT NOTICE
Neither LDC (Managers) Limited (‘LDC’) nor any other member of the Lloyds
Banking Group will be acting for you in any way in relation to the transaction
referred to in this presentation. In particular LDC will not provide any investment
services to you or advise you or your shareholders on the merits of, or make
any recommendation to you in relation to, the terms of any transaction. LDC is
not therefore responsible for providing you with the protections afforded to its
clients and you should seek your own independent legal, investment, and tax
advice as you see fit.
LDC will not advise you or your company on insurance matters or arrange
insurance cover. If you ask us to, LDC can give you contact details for an
insurance broker who can advise you and/or your company on any insurance
matters.
The contents of this presentation are confidential to LDC and should not be
disclosed to third parties without LDC’s prior consent. No statements made by
LDC representatives shall give rise to any contractual or non-contractual
arrangement or professional engagement, or constitute any legally binding offer,
promise or assurance of any nature, unless expressly confirmed in writing and
signed by all relevant parties.
No representative of LDC has authority to behave in any way which would
contradict the statements made above.27/03/2017 LDC
LDC (Managers) Limited
Registered Office: One Vine Street,
London W1J 0AH
Registered in England No. 2495714
Authorised and regulated by the
Financial Conduct Authority, firm
reference number 147964
Part of Lloyds Banking Group
Sheila Dean,
Global CEO
LDC Private Equity briefing in conjunction with DED – Q & A
16th March 2017