SOUTHERN VIEW NOVEMBER 2016

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1 SOUTHERN VIEW NOVEMBER 2016

2 WELCOME Welcome to Southern View, our new update from LDC in the South. In this edition we ll be taking a look at business activity across the region, delving into our portfolio to showcase recent success stories and speaking to leading business figures to find out their views on business outlook in the region m 460m 3,500 Years in the South Management teams supported Investment deployed Total revenues of current portfolio Jobs supported in the region and beyond The South of England has a rich and varied business landscape and, despite the economic uncertainty in recent months, the momentum of the region s business community hasn t faltered. There are a great deal of positive movements happening on our doorstep. Notably, the recent government support for a third runway at Heathrow airport and the 200million committed investment in Gatwick airport in 2017, which will underpin the region s status as one of the UK s leading transport hubs. As Crossrail begins to take shape we ll soon start to feel the benefits of improved rail links across the region, which will have a knockon effect for local businesses. Our job is to help management teams capitalise on opportunity, ensuring firms across the region have the access to capital and expertise to achieve scale and build value. In line with this, LDC has pledged to invest over 1.2billion over the next three years to support the growth of ambitious mid-sized businesses throughout the UK. YANN SOUILLARD MANAGING DIRECTOR OF LDC IN THE SOUTH

3 LATEST NEWS So far in 2016, LDC has invested over 340million in deals across a variety of sectors, enterprise values and equity stakes across the UK, and generated proceeds of more than 365million from ten exits. It has been a busy year for LDC across the South, with two brand new investments, one exit and a range of follow-on funding provided to our portfolio businesses. In August, LDC provided 37.5million of capital to accelerate the growth of the UK s leading field service engineer logistics and supply chain technology solutions provider. The deal valued ByBox at 105million, and will support the company s continued organic growth in the UK. It will also help ByBox to fast-track its global technology deployment, expand its courier proposition and continue to develop its click and collect service. We knew we needed the right investment partner to support our longterm growth plans. It was clear from the outset that LDC s experienced team, straightforward approach and flexible investment model meant they were the perfect partner for us, and I m excited that we re now well placed to expand, innovate and invest in the future of our business. Stuart Miller, CEO, ByBox LDC recently backed the management buyout of CIPHR; the leading provider of HR management software, targeted at small and mediumsized organisations. Since the investment in March, LDC has worked with the business to further develop its SaaS offering and cloud-based technology product range, as well as identifying potential acquisition opportunities. LDC is an experienced investment partner with expertise in the SaaS arena, and has already introduced us to several of its existing portfolio companies for whom the CIPHR product is ideal. Working with LDC has given our management team the extra support needed to accelerate growth and identify strategic acquisitions. Chris Berry, CEO, CIPHR Since CIPHR joined LDC s portfolio, it has already sold its HR software and systems to four other LDC portfolio companies including Microlease, Equiom, Clifford Thames and The Property Software Group. The Property Software Group (PSG) is the UK s market leading provider of software solutions to property professionals and is used in over 8,000 agency branches. After three years of impressive growth with LDC, PSG was acquired by Zoopla Property Group plc for 75million. LDC began its partnership with PSG in 2013 when we supported the 17.8million management buyout of GMG Property Services from Guardian Media Group. The investment supported the development of PSG s cloud-based offering, which now accounts for almost 50% of revenues, and the acquisition of its smaller rival, Jupix, in June Sales grew 56% between 2014 and 2016 from 10.2million to 15.9million. The sale of the business in 2016 to Zoopla Property Group means PSG joins a group of the UK s leading online consumer brands LDC has been the perfect business partner on every level. We can t thank the team highly enough for the strategic, financial and operational support they have provided, which has truly transformed the business and leaves us in fantastic shape for the next stage of our exciting journey. Mark Goddard, CEO, PSG

4 DELIVERING GROWTH Private equity is a powerful tool for growth. The provision of capital, combined with strategic and operational support, is critical to building stronger businesses and increasing shareholder value. A recent study into the social value of private equity showed LDC portfolio companies grew three times faster than the national average for all SMEs, with aggregate employment in our portfolio companies increasing by 27% and turnover by 20% during our stewardship. Here we look at the significant growth of three of our portfolio companies in the South; Equiom, EDM Group and BOFA International. LDC has supported Sheila Dean and the management team of Equiom, the leading provider of fiduciary and administration services, since Over a three year period LDC has invested over 22million in nine strategic acquisitions, most recently Dubai-based Links Group and Asia-based Heritage Trust Group. Sheila Dean, Global CEO of Equiom, said: Our latest acquisitions expand Equiom s jurisdictional reach into the new areas of Singapore and BVI while expanding our current team in Hong Kong for Equiom clients this provides further access to international services and expertise. Equiom s revenue has grown fourfold since our investment, and it is fast becoming the stand-out business in the fiduciary services sector, with offices in many of the world s premier international finance centres. International information management specialist EDM Group has completed seven strategic acquisitions, both in the UK and internationally, since LDC s original investment in The business extended its global footprint with the launch of EDM in North America, with its rapid international expansion seeing the business top the Sunday Times HSBC International Track 200 in Sam Ferguson, Global CEO of EDM, said: It was a natural decision to go to America, where the business style is very similar to the UK. We acquired a business over there and it s done very well for us. The American market is much larger than the UK s, and we now generate half our revenue from over there. The EDM Group has seen its annual turnover grow ninefold since LDC s original investment in In August 2015, LDC completed the management buyout of BOFA International, the global market leader in Fume Extraction Technology to help support its continued growth and development, including expansion into new markets and further investment in product development. Since the investment, LDC s Value Enhancement Group has worked closely with the business to help drive its performance and support its research and development. Tony Lockwood, Chief Executive of BOFA said: Having achieved consistent growth in recent years, we re well positioned to capitalise on future growth opportunities. The financial backing and strategic input that LDC s investment brings will have a great impact in helping us to facilitate these ambitions. FOR MORE INFORMATION ON THE GROWTH OF THESE BUSINESSES VISIT

5 MOTORING AHEAD LDC supported the management buyout of Clifford Thames in Two years on, we speak to CEO Calvin Barnett, to understand what it s like to work with LDC and hear his view on the impact private equity investment has had on the business. WHY DID YOU CHOOSE LDC AS A PARTNER? It was important for us to find a partner that understood the business, but also understood its dynamics. LDC very quickly came across as professional, but also adaptable and flexible - their approach was very honest and upfront. Straight away our management team felt very comfortable that this was a team we could do business with. HOW HAS YOUR RELATIONSHIP WITH LDC DEVELOPED? Our relationship with LDC has developed from the initial investment process, but the most encouraging thing is that the chemistry that we had prior to the deal has continued. We re still working with the same team that we were initially introduced to, which provides a great amount of continuity for us. WHAT ADDED VALUE HAS LDC BOUGHT TO THE BUSINESS? LDC has shown a genuine desire to work with our management team to grow and develop our business. I d describe their approach as a light hand on the tiller, steering us through some of the challenges we have faced as we have grown and matured into a bigger company. LDC s support and capital has helped us continue to develop our software service capabilities to existing and new clients as well as supporting our international merger and acquisition priorities, most recently with our acquisition of German-headquartered AC AutoConsult Gmbh. CALVIN BARNETT CEO CLIFFORD THAMES Through LDC s Value Enhancement Group we have made some valuable connections - having the ability to network with people that LDC and its partners work with is priceless. WHAT TIPS WOULD YOU OFFER TO MANAGEMENT TEAMS LOOKING FOR INVESTMENT? Get on and do it. If it s right for you, if you re ambitious, and if you want to grow the company it s definitely something you should do and it s never too early to start. I think for me, it was very important to get to know people as early as possible, share with them everything about the business so that together you can make an informed decision. WATCH A VIDEO INTERVIEW WITH CALVIN BARNETT AT

6 POOLE OXFORD READING SOUTHAMPTON MILTON KEYNES MAIDSTONE CHELMSFORD ACROSS THE REGION LDC s focus on the South of England spans a large and diverse business community. From the M1 and M4 corridors, to outer London and down to the Solent, our Reading office invests across eight Local Enterprise Partnerships areas. Over the years, we have seen a wealth of ambitious, mid-sized businesses with world-class potential, and with the region being home to some of the fastest growing towns in the UK, we are anticipating an uplift in business activity. We exited our investment in Oxfordshirebased Property Software Group in April 2016 in a 75million sale to Zoopla Group Plc., having helped the business grow its sales from 10million to 16million over a threeyear period. This kind of growth trajectory is not out of the ordinary we are also seeing rapid expansion with international information management specialist EDM Group. It was recently named the UK s fastest-growing business by exports in the Sunday Times HSBC International Track 200, in part thanks to a range of acquisitions we ve supported in the UK and overseas. Businesses like this are a testament to the fastpaced technology sector in the South, with TMT and SaaS firms occupying a large space in the region s economic makeup. LDC has had a number of other success in the region, from Thame-based ULS, which floated on AIM in 2014, to Wokinghamheadquartered Leasedrive, which merged with Zenith in the same year, creating the largest independent vehicle leasing provider in the UK. Another LDC portfolio company is Sloughbased ATCORE, a provider of e-commerce solutions for travel companies, which recently completed the acquisition of Tiger Bay in a move which will strengthen its travel suite and support its expansion into specialist markets. One of our most recent deals was the management buyout of Oxfordshire-based ByBox, the UK s leading field service engineer logistics and supply chain technology solutions provider, to support its international growth. It is the type of forward-thinking, ambitious business we want to back, with a considerable competitive advantage and a significant opportunity to expand. Not confined to technology and business services firms, the South s success stories span a much broader industry landscape in aerospace, engineering, manufacturing and maritime. Having had considerable success in the home market, our investment strategy with many of our portfolio businesses is to drive expansion overseas. Last year, we invested in Poolebased BOFA, a global market leader in Fume Extraction Technology, to drive its continued global expansion. LDC has also partnered with premium shower manufacturer Aqualisa to accelerate its organic growth and technology development, which has further propelled the business to the forefront of its market. Its recent accolades including the Queen s Award for Enterprise and Corgi Product of the Year awards. A more recent addition to LDC s portfolio includes one of the world s leading manufacturers of secure ID card printers, software and related consumables, Weymouthbased Magicard. The business is now geared up to accelerate its growth, and capitalise on international market opportunities. Looking ahead, the prospects for the region are bright and we re determined to play a part in supporting ambitions firms across the area who want to unlock their potential. It s not surprising that some of LDC s best success stories have come from this region.

7 NON-EXECUTIVES VIEW LDC works with some of the region s leading business figures, who sit on the board of our portfolio businesses as non-executive directors. Two of our most active chairmen, Neville Davis and Alastair Hazell give their take on business activity in the region. Neville Davis, Non-Executive Chairman of Clifford Thames Neville has over 20 years of experience in the technology sector and currently sits on the board of LDC portfolio business Clifford Thames, the specialist provider of outsourced services to the global automotive industry. Although implications of the leave vote have sent waves of uncertainty across the business community, the onus is on the ambitious management teams we have here in the region to maintain their optimism and continue to make considered investment decisions. In doing so, it will help safeguard our position as one of the fastest growing business hubs in the UK. Alastair Hazell, Non-Executive Chairman of CIPHR and SSP Alastair Hazell specialises in the information, data and software sectors, and was previously chair of specialist provider of real estate software, Property Software Group (PSG). He is currently chair of CIPHR, a human resources software provider, as well as non-executive director of SSP, an insurance services software provider. The South of England has a highly successful technology sector, which significantly enhances its entrepreneurial nature. The innovative and fast paced development of SaaS based technologies in particular has changed the business models of many of the firms in the region - both PSG and CIPHR are examples of this. By developing cloud based products these businesses have been able to radically change the proposition they offer their customers, making for a more flexible and cost effective service. This in turn has led to fast organic growth, enabling PSG and CIPHR each to become market leaders in their sectors. MAKING A DIFFERENCE Our relationship with Camp Mohawk dates back to During our ten year partnership, we have raised over 105,000 for the charity and provided over 2,160 hours of labour. Most recently, we held an annual fundraising quiz night where we raised 20,000 to support the centre. Matt Wood, Centre Manager at Camp Mohawk: LDC is a long-term supporter of our charity, and their involvement is highly valued here at Camp Mohawk, as not only our single largest corporate sponsor but also one of our most dedicated. Their fundraising efforts have enabled the centre to continue to provide and improve our services which are essential to so many members of the local community.

8 LDC SOUTH TEAM Top row: Rebecca Lander, Gareth O Donovan, Alexander Clark, Emily Soden, Alastair Weinel Bottom row: Chris Baker, Yann Souillard, Jonathan Caswell LDC (Managers) Ltd. Registered Office: One Vine Street London W1J 0AH. Registered in England and Wales no Authorised and regulated by the Financial Conduct Authority no Part of Lloyds Banking Group. LDC IN THE SOUTH One Forbury Square Reading RG1 3BB Telephone +44 (0) Further information can be found at