Private equity provider LDC has extended its commitment to support the growth of UK-based manufacturing and specialist engineering businesses, after investing more than GBP250m in the sector within the last two years.
Having announced an initial commitment of GBP200m to the sector in October 2011, and increased it to GBP300m in 2013, LDC has now further increased its investment target, pledging to place a total of GBP500m into relevant new investments by the end of 2015.
The GBP500m commitment will continue to focus on firms with specialist manufacturing capabilities across a wide range of niche industrial sectors such as aerospace, power generation and oil and gas, and will be open to all UK mid-market businesses in the GBP10m to GBP150m enterprise value range.
LDC completed seven new investment transactions into manufacturing and specialist engineering businesses in 2013, whilst also realising capital gains of over GBP95m from the sector. This included strategic exits from international aerospace engineering group MB Aerospace, and AIM Aviation, a global provider of cabin interior design and build services to the aircraft industry.
LDC has now committed more than GBP770m of funding across 139 transactions to the manufacturing sector in its over 30 year history. The private equity firm’s existing industrials investments account for more than 20 per cent (by volume) of LDC’s total investment portfolio, representing over GBP260m of investment, making it the single most important sector to the firm.
Steve Aston, investment director at LDC, says: “Throughout its 30 year history, LDC has committed more capital to the UK manufacturing sector than any other mid-market PE house, reflecting our strong connection with, and on-going drive to, provide financial and strategic backing to growing mid-market businesses operating in this space.
“UK manufacturing enjoyed further sustained growth in 2013, with the latest CBI Industrial Trends Survey reporting that the size of total order books and the pace of output growth in the sector for the past three months to December 2013 were the highest recorded since 1995. This on-going improvement in trading conditions represents a sound opportunity for manufacturers and we want to support these businesses in delivering their growth objectives.”
