YORKSHIRE & NORTH EASTERN VIEW 2017
WELCOME Welcome to the first issue of Yorkshire & North Eastern View a digest of investment news, portfolio successes and business opinion from LDC in the region. 27 57 450m 833m 4,080 Years in the region Management teams supported Investment deployed Total revenues of current portfolio Jobs supported in the region and beyond The region has long enjoyed a reputation as a hub of innovation and ambition. From manufacturing, healthcare and business services to construction and consumer brands, we see an abundance of ambitious, small and mid-sized businesses focused on growth. It is this diversity and positivity that will help the region s businesses thrive in the face of any uncertainty. From our investments in games developer Team17, building systems specialist PAW Holdings and cycling parts and accessories distributor ZyroFisher, we backed the growth ambitions of some of the region s most exciting businesses in 2016. Indeed, 2016 was our most active year since opening the Leeds office in 1989, something which saw us pick up Private Equity Team of the Year and Deal of the Year for ZyroFisher at the Insider Dealmaker Awards. LDC s national pledge to invest a further 1.2billion over the next three years is a clear signal of our commitment, and an important message of confidence in Britain s business entrepreneurs, owners and managers, and their visions for growth. JOHN GARNER DIRECTOR AND HEAD OF LDC IN YORKSHIRE AND THE NORTH EAST
NEWS IN BRIEF When it comes to investment activity, 2016 was our most successful year to date in Yorkshire and the North East. The team invested almost 80million of equity into a variety of businesses right across the region. Recognising the cycling parts and accessories industry is entering a phase of consolidation, LDC backed the management buyout of specialist distributor, Zyro, together with the simultaneous acquisition and merger of Fisher Outdoor Leisure. The deal created a combined group with sales of 70million and a marketleading distributor of more than 50 world class parts, accessories and clothing brands. LDC s support has been vital in ensuring the merger process has been as smooth as possible. We re now working together to ensure we can maximise the opportunities presented by the growing popularity of cycling, both in this region and across the UK, to cement our status as a leading player in the market. Matthew Barker, CEO, ZyroFisher A deal that reflects the strength of the region s booming digital sector is LDC s 16.5million investment in Wakefield-headquartered Team17, the market-leading games developer and publisher best known for the popular Worms franchise. We ll be supporting the business international growth plans as part of the ongoing investment strategy, as well as helping to identify further acquisition opportunities. In LDC we have a partner that not only shares our vision, but also understands the importance of people to our business model. People are the foundation of the gaming industry and as both a developer and a publisher, it s incredibly important that we continue to nurture new talent and fully support our partners. Debbie Bestwick, CEO, Team17 LDC backed the management buyout of Skipton-based PAW Holdings Limited the UK market leader in the design, manufacture and installation of pre-engineered light gauge building systems. With an established track record, the business generated revenues of 23million in its latest financial year. Our partnership will focus on building out its product and service portfolio, ensuring it s well-placed to enter its next stage of growth and development. Our partnership with LDC marks the next phase of the business growth strategy, and I m pleased that we have a partner that not only supports our ambition but also has the knowledge and experience to help us reach that next level. Roger French, CEO, PAW LDC invested more than 20million to support the management buyout of York-based Mitrefinch, one of the UK s leading developers of human capital management software. Our investment supports the expansion of the business at home and overseas including Canada, the US and Australia. It will also enable Mitrefinch to further develop and improve its suite of products, including its software as a service (SaaS) offering. From the outset, LDC saw the potential in the business and bought into our plans as a management team. Their approach, track record and sector expertise gave us the confidence they were the right longterm investment partner to help us deliver our ambition for the business. Debbie Guppy, CEO, Mitrefinch
DELIVERING VALUE For nearly three decades, LDC has been backing forward-thinking businesses in a diverse range of sectors. Here, we look at some of the ways our team is helping to support and drive the long-term growth of two current portfolio companies in Yorkshire and the North East. VIEW FROM THE TOP The management buyout of global insurance technology specialist SSP was one of Yorkshire s biggest investment deals in 2015. A market leader in the provision of mission critical IT systems and services to the general insurance industry, its services are delivered in 50 countries to over 50,000 users. The business helps organisations use their data to better analyse risks, improve efficiencies across platforms, reduce costs and improve customer experience. Since our investment, we ve been working with the management team to drive its organic growth strategy, which led to revenue growth of 10 per cent last year, and supporting further development of its innovative data offering. We speak to Team17 CEO Debbie Bestwick to understand the challenges of building a high-growth tech business and how partnering with the right investor can help firms to compete in an ever-evolving and competitive industry. Adler and Allan (A&A) has become one of the UK s leading suppliers of oil and environmental services, offering expertise that includes emergency response, environmental, mechanical, electrical and asset protection services, as well as specialist fuel service capabilities. Since investing in the secondary buyout of A&A in September 2014, we have worked with its management team to help broaden its services, as well as the geographical area it covers. This has been achieved through a series of small, bolt-on acquisitions, including a recent investment which brought Worcester Electrical Services into its portfolio. WATCH A VIDEO INTERVIEW WITH MARK CALVERT, CHIEF EXECUTIVE OF ADLER & ALLAN AT WWW.LDC.CO.UK/PORTFOLIO/ADLER-AND-ALLAN DEBBIE BESTWICK CHIEF EXECUTIVE OFFICER TEAM17
WHAT ARE YOUR TIPS FOR BUILDING A HIGH-GROWTH BUSINESS? The key to growth is to know your product inside out, to be alert to new developments and technologies, and to always be on the lookout for good ideas. It s also important to take the time to refine and perfect them. No matter how good your product is, the value of sheer hard work can t be underestimated. I started off working part-time in a video games store when I was 17, and through pure effort, I made it something before progressing through the industry. My whole career has developed along the same sort of lines. There are few greater pleasures than taking something small and making it into what you feel it could and should be. WHAT IS THE IMPORTANCE OF PARTNERING WITH THE RIGHT INVESTOR? For me, it s important to surround myself with the right people. Those that will help you reach your potential. In many cases, this inner-sanctum will be made up of industry experts, but entrepreneurs should never be afraid to look outside the industry for people who can complement what they do. The same principle applies when looking for an investor. It s about building a team around you that offers expertise to complement your own, leaving you to refine your product while your partners ensure it has a solid foundation to sit upon. One of the key reasons why we opted to do business with LDC is the fact the team understood the importance of our business model, and our philosophy of nurturing new talent and supporting partners. They re on the same page when it comes to growing sustainable studios and creating successful IP, which is vital to us. Ultimately, though, LDC underpins our team s expertise and brings experience of working with businesses that operate overseas. This leaves us best-placed to pursue our ambition of becoming a major player in the global games market. WHAT ARE YOUR PLANS FOR THE FUTURE? Our ambition is to build Team17 into an international label, and in LDC, we have a partner that will help us get there. In the immediate future, we re focusing on our next releases; Playtonic s Yooka-Laylee, Mothership s Aven Colony and recently acquired Mouldy Toof s Escapists 2. We also have plenty of other plans in the pipeline; 2017 is already set to be an exciting year!
BACKING BUSINESS AMBITION The industrious towns and cities across Yorkshire and the North East are all playing their part in driving the Northern Powerhouse forward, and at the crux of this is an abundance of ambitious mid-sized firms. Backed by strong management teams, there are businesses across all sectors of the economy investing for the future, exporting to new markets and launching innovative products and services. One sector making a name for itself in Yorkshire and the North East is the technology industry. With the turnover of digital technology businesses in the UK growing 32 per cent faster than the national average, the potential of these organisations is clear. Indeed, some of LDC s most recent technology investments come from this region. A new addition to the LDC portfolio in 2016, cloud IT and communications firm, Giacom is based in Hull. With a focus on the micro-sme market, Giacom now operates one of Europe s fastest growing cloud marketplaces. York-based Mitrefinch, which provides human capital management (HCM) software to more than 3,500 organisations, is helping to reduce costs whilst improving efficiency and compliance. LDC invested 20million to support the business international expansion, and is continuing to develop new and existing relationships in the UK. Not confined to technology, the region s success stories cover a much wider landscape. With a great history and provenance in the food and drink sector, it s little surprise to see that many local brands are thriving on a national stage, whereas the region s support services sector is also going from strength to strength. Firms like the iconic Yorkshire crisp brand Seabrook, also an LDC portfolio company, continue to make waves both at home and abroad. Following a deal to supply its premium Lattice crisps to Lulu Hypermarket, the Gulf supermarket chain with stores across the Middle East and India, Seabrook is now in talks with a number of international buyers and has many more exciting export prospects in the pipeline. Another firm making a name for itself internationally is Bradford-based Driver Hire. The specialist transport and logistics recruiter, which is part of the Specialist People Services group, has recently announced it will open a fifth Driver Hire Australia office in 2017, the group s fifth year of operating in the country.
THE FINISHING LINE Business ambition is all about drive and determination, attributes that are commonly seen in the sporting world. At LDC, we re no strangers to sporting ambition thanks to our long-standing partnership with renowned adventurer, Mark Beaumont, who famously broke the world record for cycling around the world, and more recently completed his Africa Solo mission in 2015. Our corporate ambassador is quick to hail the parallels between sport and business, and the importance of making sure you have the right team around you. Ultimately, whether you re cycling around the world, or looking to maximise the potential of a company, the aims are the same. You have to trust the target, but you have to put in the effort to achieve it. Most challenges are won or lost before you get to the start line, and due diligence and planning are paramount. A sustainable success story relies on a team of experts who trust each other s dedication and skills. Above all, it is this support network that will help you reach the finish line. MAKING A DIFFERENCE LDC s 11th annual charity quiz saw businesses from around Yorkshire and the North East compete head-to-head with teams nationally. The event raised over 150,000 for several charities, including our charity partner in Yorkshire, Maggie s Cancer Caring Centre. Support from businesses like LDC is absolutely vital to the work that we do, without it we wouldn t be able to create a calm and uplifting environment that enables us to provide our programme of support to people living with cancer. The new centre at St. James will help us to service a population of around 2.7million people across the Yorkshire region, and we re looking forward to the launch of the centre in 2017. Laura Lee, Chief Executive, Maggie s
LDC YORKSHIRE & NORTH EAST TEAM The LDC team winning the Private Equity Team of the Year at the 2016 Insider Dealmaker Awards Left to Right: Ben Snow, Rob Powell, Zara Lane, Jane Gilbert Boot, Dale Alderson, John Garner, Dan Smith WWW.LDC.CO.UK/YNEVIEW LDC (Managers) Ltd. Registered Office: One Vine Street London W1J 0AH. Registered in England and Wales no. 2495714. Authorised and regulated by the Financial Conduct Authority no. 147964. Part of Lloyds Banking Group. LDC LEEDS 1 City Square Leeds LS1 2ES T: +44 (0)113 235 5050 LDC NEWCASTLE Black Horse House 91 Sandyford Road Newcastle upon Tyne, NE1 8HQ T: +44 (0)7880 788 946 Further information can be found at www.ldc.co.uk