LDC banks £650m from exits in 2010

Lloyds’ captive private equity investor has completed six exits this year, including three trade sales in recent weeks.

Lloyds Development Capital (LDC) completed its fifth and sixth exits of 2010 this week with the trade sales of Omega Red and Cable Management Group, taking LDC’s total exit value for 2010 to £650 million (€744 ; $1 billion).

Electrical equipment company Omega Red was sold to utility services group South Staffordshire, a portfolio company of infrastructure investor Alinda Capital Partners.  The sale price was not disclosed but LDC made 3x its investment in the Nottingham-based firm, which it acquired in February 2008.

These were all deals made during 2007 and 2008. They all traded very well throughout the downturn, therefore we felt when things started to pick up, or when strategic buyers started coming back to the market, they'd be valuable assets

John Garner

Earlier this week LDC unveiled the $110 million sale of telecoms company Cable Management Group to the Thomas & Betts Corporation, a Tennessee-based electrical components manufacturer listed on the NYSE.

Both exits follow quickly on the heels of another trade sale completed less than a fortnight ago: the £62.5 million sale of fake tanning business St Tropez to PZ Cussons, the maker of Imperial Leather soap.

“These were all deals made during 2007 and 2008,” said LDC investment director John Garner, speaking with PEO. “They all traded very well throughout the downturn, therefore we felt when things started to pick up, or when strategic buyers started coming back to the market, they’d be valuable assets.”

Other exits this year included the secondary sale of Card Factory to London-based private equity firm Charterhouse in a £350 million buyout in April. The UK-based greeting cards business reportedly attracted interest from other private equity firms such as Permira, Cinven and Warburg Pincus.

Also, in August LDC exited security services firm Vision Security Group with a £64 million sale to Compass Group UK, which provides food and support services to various sectors including defence. The transaction generated LDC 3x its investment.

In the other exit of the year, surveillance systems manufacturer Kylmar was sold to the UK arm of defence contractor General Dynamics.

This flurry of exit activity mirrors LDC’s prolific investment pace this year, which has made it the most active in the UK midmarket during 2010, according to data provider Mergermarket, spending more money on more deals than any other player, with a total deal value of £500 million, £230 million of which in equity.