Uncertainty appears to be the new normal for all business leaders. As a leading investor in mid-market companies across the UK, we know that management teams are actively exploring avenues to stay ahead of the competition and build agility and resilience so they can better withstand the shocks from such an unpredictable environment.
We have noticed a marked increase in M&A activity to consolidate and help companies to supplement organic growth and deliver value. It is a proven option which can lower the risk of expanding into new geographies or developing new products and services. LDC is actively supporting the management teams we back in this area, having helped our portfolio companies to make 65 acquisitions in 2021 alone.
Last year, we supported manufacturing firm Stuart Turner to make its third acquisition in three years. Alongside a strong focus on new product development, these acquisitions have helped Stuart Turner to become a complete solutions provider in the pressurisation and hot water generation market across the domestic, commercial, and industrial sectors.
In addition to acquisitions, we have also seen private equity-backed businesses invest heavily in digital transformation to help drive efficiencies, improve agility and encourage innovation. It also helps management teams to improve decision making and prioritisation.
Our partnership with the management team of Newcastle-based tech platform NBS is a good example of investing in digital to improve competitiveness. We helped the business to move from legacy on-premise products to cloud-based software-as-a-service (SaaS) solutions. This shift allowed the business to deliver greater value to its customers - by bringing construction specifiers and manufacturers together digitally - it improved the quality of customer’s decision making, delivering efficiencies whilst also reducing risk. It provided a scalable solution for the business that enabled it to accelerate growth in the UK and internationally whilst also shift to a monthly recurring revenue-based model.
These are just two of the most popular approaches that private equity-backed businesses are currently pursuing to drive value and remain competitive. With over 40 years’ experience backing more than 650 management teams across every stage of the cycle, we recognise that the most important trait for any business leader looking to deliver their growth plans is ambition and a desire to succeed. We are actively exploring opportunities to deliver on our commitment to back 100 ambitious management teams to grow their mid-market businesses over the next five years.
Authored by Dan Smith
Partner and Head of Yorkshire, LDC
This article was originally published in 2022 as part of the BVCA's Vision Awards, and some of the content may now be out of date. Please contact the BVCA if you have any queries or need further assistance.
