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30 March 2020
The current Covid-19 crisis is bringing unprecedented levels of uncertainty and disruption to the way businesses carry out their day-to-day operations. Having backed more than 600 management teams of mid-market businesses through the highs and lows of the economic cycle since 1981, LDC strongly believes the common thread to business success is an enduring ambition to succeed.
As the private equity arm of Lloyds Banking Group, we’re not bound by some of the conventions of the wider industry. We are patient with our capital which means we back companies through every stage of the cycle, working side by side with business leaders to support their ambition.
Our approach to private equity partnership means that it is not about the length of the partnership, but about being flexible to make sure business leaders can still achieve their ambitions and help their businesses deliver on potential.
When we invested £33m to back the secondary buyout of Welsh-based pharmaceutical manufacturer Penn Pharma (Penn) in 2007, we didn’t expect the challenging trading conditions that followed and affected most of UK business. However, we continued our support, introducing an experienced non-executive director who helped the management team to stabilise operations and deliver a growth plan.
In 2013 we provided additional funding to help the business open a £14m world-class manufacturing facility. Penn Pharma doubled revenues during our seven-year partnership, which led to the acquisition by a US corporate in 2017 as part of a £127m deal.
Dr Richard Yarwood, Former Chief Executive of Penn Pharmaceuticals said: “LDC’s support and strategic input to our business has been invaluable, and ensures that we are now well placed to embark on the next stage of our growth plans.”
When we invested in Microlease in 2006, the management team was only at the beginning of its growth journey. For more than a decade we worked alongside the team to help transform the business from a small UK company into an international leader in electronic testing equipment. After integrating six complementary businesses that took Microlease into the US and Europe, revenues had increased from £17m to more than £100m, while profits more than quadrupled to £35m.
Microlease’s phenomenal growth in international markets caught the eye of Electro Rent Corporation. The US-based company acquired Microlease in 2017 to create a global leader in its field. Nigel Brown, CEO of Microlease, said: “Our 10-year partnership with LDC enabled us to transform the business from a small, UK company to an international player with an unrivalled infrastructure and breadth of expertise.”
While our support was important to the growth of these businesses, the enduring ambition demonstrated by the management teams to succeed and not give up on in the face of adversity was critical. It’s why we remain committed to our portfolio and to supporting the ambitions of mid-market businesses across the UK with £1.2bn to invest over the next three years.
Now more than ever is the time to come together to encourage ambition across the nation.