Edinburgh-based mid-market firm Dunedin has sold its original stake in UK same-day parcel delivery service CitySprint to LDC.
Dunedin re-invested into the Surrey-based company for a minority stake. CitySprint’s management team headed by CEO Patrick Gallagher retains a “significant shareholding” in the company, LDC said.
The deal values the company at £175 million ($250 million; €225 million) and is understood to have generated a 2.8x return for Dunedin.
The firm invested £33.1 million into the company in 2010 through Dunedin Buyout Fund II, a £250 million, 2006-vintage vehicle, with the rollover investment coming from the same fund. That fund has realised four investments, with six remaining, it is understood.
Dunedin Buyout Fund III, a £300 million fund launched in 2012, is 50 percent invested in four deals with an investment period that runs until 2017. In February, the firm invested £80 million in asset management consultancy Alpha Financial Markets Consulting.
CitySprint made 21 acquisitions under Dunedin’s ownership and expanded its network to 40 service centres across the UK and more than 3,000 self-employed couriers.
The company reported £146 million of revenues in 2015, a 14 percent increase on the previous year, and EBITDA of £16.8 million.
In early February, LDC announced it planned to increase its investment in growth businesses in London and South East England over the next three years, pledging £450 million to invest in mid-sized businesses “which it believes are key to the region’s long-term economic growth”.
LDC’s existing investments in these regions include restaurant group D&D London, macro-economic forecaster Capital Economics, online travel agent Iglu and PEI Media Group, which publishes Private Equity International.
LDC’s London team generated exit proceeds of more than £250 million last year, through the sale of portfolio companies including drink brand Fever Tree through an initial public offering, the £160 million sale of price comparison website uSwitch to Zoopla Property Group, and the £55 million sale of television production company Twofour Group to ITV, it said in a statement.
The firm plans to invest a total of £1.2 billion in mid-sized businesses across the UK over the next three years, including £300 million in the North West, it said. In January it announced an investment target of £100 million this year for the North West, up from £80 million last year, deployed by its Manchester office.
LDC has additional offices in Aberdeen, Birmingham, Bristol, Edinburgh, Leeds, Nottingham and Reading.
The firm invests in companies with a turnover of at least £5 million and profits of more than £1 million with equity cheques of up to £100 million.