LDC swoops on D&D London

LDC, the private equity arm of UK-based Lloyds Banking Group, has backed the management buyout of restaurant group D&D London. 

The deal, which will see LDC become the owner with a 69 percent stake in the company, values the business at £50 million. The firm is to buy the 51 percent stake held by Sir Terence Conran, the company’s founder, as well as the 18 percent stake owned by fellow UK manager Caird Capital. The management team is to retain ownership of the remaining 31 percent. 

Conran, a prominent British designer, started his restaurant group in 1991. He sold a large stake of the business in a management buyout in 2006, when the company was then rechristened D&D London, taking its name from the initials of its two top executives, Des Gunewardena and David Loewi. 

D&D London operates more than 30 restaurants in the UK and globally

The group now comprises more than 30 restaurants. These include a number of celebrated London venues, such as Coq d’Argent, Skylon or Pont de la Tour, as well as several international ventures in New York, Paris, and Tokyo. 

“We are definitely backing Des and David to open new sites,” Bertie Aykroyd, investment manager at LDC, told Private Equity International. “We will continue to be very focused on high-quality, central London sites, as well as selectively looking for other opportunities both across the UK and overseas.”

The group opened nearly eight new venues in the UK last year, including a £50 million, 80-room hotel in the City of London – its first foray in the hotels business. It plans to inaugurate its latest international venue, a restaurant complex in Istanbul’s Trump Towers, in May 2013. 

“Given the large number of venues that have opened in recent months, the opportunity in the short term is to allow these to bed down while increasing the rate of investment at existing sites, some of which have been trading successfully for several decades,” Aykroyd explained. 

D&D will be equipped with a completely new debt structure upon completion of the deal, he said, as part of a financing operation that will involve credit provided by BlueBay Asset Management. 

The firm is new to the retail and consumer sector, having recently invested in New World Pubco, Fever Tree, Original Additions and musicMagpie. It also pledged £20 million to a partnership with Hill Capital Partners, which invests in UK bars and restaurants, in September last year. The capital, to be spread between four or five deals over the next 12 to 18 months, is allocated on a deal by deal basis. 

LDC, Founded in 1981, receives the entirety of its equity financing from Lloyds Bank. This allows the firm to take a long-term view on its investments, Aykroyd said. “As a result, we very much hope that we will be value-added partners for D&D for a number of years.”

The firm completed 18 deals in 2012, for a total value of £280 million.