Private Equity News & Analysis

Gresham exits military logistics consultancy

Gresham Trust, a UK private equity firm, has had another hit with the exit of LSC Group, a military logistics group based in Staffordshire.

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Following on from a series of successful exits in the services sector this year,Gresham Trust has sold LSC Group for £13.5m.

Since Gresham invested in LSC in June 1998, the group has delivered asset management, logistics, and information management systems for the defence sector. This made is an attractive proposition for DML , owner of Devonport Royal Dockyard and services supplier to the military.

Gresham has seen a thirty five per cent IRR on its investment. 'It is a good deal,' said James Barbour-Smith, portfolio director at Gresham Trust. 'And another in a series of good exits for us in the services sector.'

This series of good exits includes the sale of Pall Mall Support Services, a commercial cleaning company, to John Mowlem, the construction group, for more than £42.4m. Gresham realised three times its investment and a gross IRR of 52 per cent on the sale in July.

Another success story is Parkman, one of only two corporate new issues on London's main market in the third quarter of this year. The engineering consultancy's IPO raised £10m and valued the company at £55m.

According to Barbour-Smith, Gresham's success is down to three factors – firstly that the group maintains a theme of good management. Secondly that it looks for good customer bases, and thirdly that a company's earnings are clearly visible.

That said, Gresham, which has been investing in middle market companies since 1925, is not planning anymore exits for at least the next six months,
said Barbour-Smith.