Mid-market private equity firm LDC has completed the sale of its stake in water cooler service provider Angel Springs, in a multi-million pound deal with Germany-based private equity provider Castik Capital.
The transaction provides an excellent return for LDC, delivering a money multiple of 3x its original investment in just over three years.
Headquartered in Wolverhampton, Angel Springs provides both bottled and mains fed water coolers to businesses and organisations throughout the UK and currently services more than 60,000 water coolers. The business has a UK-wide network of 10 strategically located regional service and distribution centres, enabling it to deliver a customer-focused local service on a national basis.
After taking a significant majority stake in Angel Springs in 2011, LDC’s investment strategy was to support the business’ existing management team, led by Managing Director John Dundon, in driving organic growth alongside an ambitious buy-and-build growth strategy. This was successfully executed and during the investment period, the business secured significant new contracts with both SMEs and multi-site blue chip organisations, whilst completing nine strategic acquisitions, resulting in increased customer density and service distribution efficiencies in key geographic regions right across the UK.
In 2012, LDC also supported Angel Springs’ head office relocation to a brand new state-of-the-art 10,000 square foot building in Wolverhampton. This expansion and investment in core infrastructure has enabled the business to further increase and effectively handle customer orders, whilst significantly improving its commercial facilities.
Angel Springs has achieve substantial sales and profit growth over the three years of LDC’s investment, with turnover rising from circa GBP14million to circa GBP20million for the financial year ended March 2014. LDC has worked in partnership with a management team with extensive sector knowledge to implement a strategic plan focused on operational improvement, geographic expansion and an aggressive buy and build programme. Employee numbers have also risen considerably during the investment period, with the business now employing more than 200 people, up from 131 people at the beginning of 2011.
The original investment and subsequent exit was completed by LDC’s Birmingham based team, led by Director and Birmingham Office Head Andy Lyndon, who acted as LDC’s representative on the board throughout the investment. The deal was transacted by LDC with support from a number of regionally based advisors including Deloitte, PwC and Freeths.
Martin Draper, Chief Executive of LDC, says: “In Angel Springs, we recognised the opportunity to partner with a high quality management team and a business with a leading reputation for quality and customer service. Since our investment, we have worked closely with the management team to accelerate growth and lead consolidation of the UK’s highly fragmented water cooler market. With nine successful acquisitions completed in three years, ‘buy and build’ has proved to be a highly effective growth strategy for the business, complementing its new customer wins and strong organic growth, with the business consistently outperforming the market.
“The deal with Castik Capital represents an excellent outcome for Angel Springs. The business has a very strong foundation upon which to progress further under its new ownership and we wish the whole team all the very best for the future.”
John Dundon, Managing Director, Angel Springs, says: "Over the last three years, LDC’s Midlands’ team has invested considerable time and resource to our business, helping us to meet ambitious operational and acquisitive growth objectives, with their support and strategic input being invaluable.
“With LDC’s backing, we have consistently invested in the business for the benefit of our customers whilst striving to improve efficiency across our service and delivery models, and this approach has resulted in success on a national scale. We’re now looking forward to building further on the achievements of the last three years in conjunction with Castik Capital.”
The sale of Angel Springs to Castik Capital represents LDC’s 12th exit of 2014 and follows successful realisations with Quantum Pharmaceutical, NRS Healthcare, Kirona, Vysionics, Penn Pharmaceuticals, Benson Group and NES. This year to date, LDC has invested over GBP225million of new funding, together with more than GBP26million of growth capital to support portfolio business acquisitions.
