Great news on two fronts…firstly we have been able to invest in the secondary buyout of Ocean Outdoor, the leading operator of digital ‘Out of Home’ (‘OOH’) advertising sites and secondly…and of perhaps of most importance is the recognition they received at last night’s LoveContent awards during the Screenmedia Expo 2012 when they received an Industry Award.

This award recognises the organisation or individual that has done the most to drive the industry forward over the last 12 months. Last year they received an award for the Best New Digital Site, which was for Ocean’s Eat Street, Westfield & Hammersmith Towers site.

Outdoor advertising in the UK is worth close to £1 billion in annual revenues and Ocean operates in the fastest growing segment: digital OOH advertising. This has been growing at around 30% annually – on current trends it is expanding at three times the rate of the overall advertising market – and Ocean’s recent growth rates have been ahead of the sector average.

Congratulations to Ocean from everyone at LDC and we look forward to seeing even more recognition in the months and year’s ahead!

Note: This is LDC’s second media transaction in the past 12 months, with over £154million now invested as part of LDC’s £200million commitment to the TMT sector. YTD LDC has invested over £150million in nine businesses, bringing LDC’s 12 month equity run rate to over £440million.

Easynet Global Services is a specialist telecommunications business that designs and manages data networks for large businesses as well as providing managed hosting and video conferencing solutions around the globe.

LDC invested in Easynet in 2010 from BSkyB for £100million, which is LDC’s largest single investment to date. The company has grown strongly over the past two years with some notable client wins and with six offices in Asia (China and Hong Kong) has the largest presence in the region of LDC’s portfolio companies.

Arjen Berendsen, Easynet’s Managing Director USA and Asia Pacific, explains how the firm has capitalized on its relationship with LDC and, in particular, the experience and expertise that LDC’s Hong Kong office has built up in the region and the contribution this has made to Easynet’s growth.

 “LDC has been very supportive since the acquisition and we have made the most of the opportunities that LDC’s portfolio companies and its strong international relationships offer, as well as taking advantage of its growing presence in Asia. LDC has really engaged with our business and we continually share information, market perceptions and insights”.

LDC has facilitated relationships with complementary businesses and strategic partners, both within its portfolio, e.g. UK2 Group, an international web hosting company, and OnApp, a Cloud, CDN and storage software provider, and externally, e.g. Gammon Construction, a leading construction company in Southeast Asia, and PwC.

The firm has helped us with our networking in Asia, putting us in touch with potential customers or joint venture partners from the deep array of corporate contacts LDC has built up. This leveraging of LDC’s contacts base has been very useful and has thrown up opportunities and relationships that we would not have been able to discover on our own.

LDC has also helped us build relationships with companies in which they have invested. For example, last year LDC put us in touch with Itibia, a company, which manufactures customer premises telecom equipment, based near Shanghai and in which LDC has made a sizeable investment. We are currently speaking to them regarding possible co-operation and a joint venture on product development at a global level.

The introduction of potential new customers by LDC, such as Hong Kong Academy, as well as the Asian operations of existing customers, such as French construction giant Bouygues, has also supported our Asia Pacific sales strategy.

In addition, LDC has provided valuable insight and good contacts at key strategic bodies such as UK Trade and Investment, a government department that works with UK businesses to help ensure they are aware of and capitalise on projects in international markets. For example, we have been introduced into their High Value Opportunities programme, which includes an IT tender for the West Kowloon Cultural District, with a total value of up to £1.7billion.

LDC’s continual support, whether to help us build better relationships in the UK and within their portfolio, or in Asia, where LDC’s office has been very active on our behalf is helping us build a better business – and that is in all our interests, whether staff, customers or investors.

 To download the full article please click here.

Katy Perry Eylure Launch

LDC backed leading beauty accessories supplier Original Additions in July 2011, to support the MBO of the business. A significant player in the beauty accessories market for more than 30 years, selling branded eyelashes, nails and professional beauty products, Original Additions has an annual turnover of more than £30million and its core brands include Eylure, Elegant Touch and Salon System.

The business is going from strength to strength, both in the UK and overseas. After a ground-breaking collaboration with Girls Aloud through the Eylure brand of false eyelashes, Original Additions’ growth strategy is now increasingly focused on key international markets, with, the recent USA launch of Katy Perry lashes by Eylure showing early signs of success.

Original Additions is now working increasingly closely with LDC’s office based in Hong Kong, in order to maximise competitive pricing advantages and to help gain a better understanding of consumer trends in Asia. Simon Zussman, Managing Director, Original Additions explains:

“Original Additions entered the Chinese market in 2011 with our Eylure brand, and from the offset, we decided to use a distributor that was already known to us in order to ensure a level of familiarity and continuity of business practice. That said we are very much on a learning curve as our work in the Chinese market evolves, and in particular we want to build a sound understanding of consumer needs in this part of the world and where possible, create opportunities to build our Eylure false eyelash brand in Asia.

“To this end, leveraging an association with LDC’s operation based out in Hong Kong has been extremely helpful. This ‘local’ team has been able to supply our business with valuable research into consumer trends and insights into cosmetic application, all of which is helping us to gain a better understanding of the spending habits of young Chinese consumers.

“Although we have a well-established network of manufacturers already in place in Asia, the LDC team in Hong Kong has been adding value and actively advising us on their ‘freight club’ contacts in order to help us gain further price advantages in our shipping of goods to the UK.

“Original Additions is engaged in a project that will help to secure manufactured product supply over the medium to long term. Due to the complexity of this arrangement, we’ve looked to LDC’s Hong Kong office for guidance and support around financial structuring and legal issues, and the LDC team has been able to assist and provide clarification on all aspects of this process.

“Having this local ‘on the ground’ insight and understanding has been extremely helpful for our business and the level of strategic support that LDC’s Hong Kong team has brought to Original Additions throughout what has been an important period of growth has been invaluable. What’s more, this international relationship undoubtedly assists LDC’s team here in the UK to better understand the opportunities and workings of our business and workings of our business in this all important Asian market.”

To download the full article please click here.

Fourteen weeks ago I was in the fight of my life.  That’s not meant to sound melodramatic, it’s a very real statement of fact.  

I was 530 miles offshore from Barbados, in the Atlantic Ocean when my rowing boat was capsized by a wave.  It was then fourteen hours before a cargo vessel managed to find me, along with my five team-mates and pluck us to safety.  When disaster struck we had been at sea for 27 days and nights, each man rowing for 12 hours a day and battling hard for the World Record for rowing the Atlantic.  

You can read the full account of what happened in my blogs for the Independent: http://blogs.independent.co.uk

LDC have been a great supporter of this expedition, as they were for many of my previous adventures.  My enterprise has always been about figuring out what’s possible, pushing expectations.  Whilst wearing suits instead of lycra, LDC completely share this mindset, so we have got on brilliantly over the last six years!  And so it’s been interesting for me to come back after sharing so many successful expedition, to talk about the Atlantic, where we failed.  You can call it a success because we all survived, but in terms of what we set out to do, we failed.  

In my life of adventures, this is not the first time that I have been in a tight spot and facing grave danger, but it is the first time that I have thought I might not come home.  Facing your own mortality is an amazingly powerful moment in anyone’s life and I have been fascinated how the mind deals with that.  It has certainly shuffled my priorities.  I recently wrote in a blog that ‘no other achievement has ever given me such lessons for the future’.  I now realise that there can be even more value in knock backs than from doing exactly what you set out to do.’  http://www.insights.com

My very first event after coming back to terra-firma and the UK was an LDC dinner in the London office.  It went very well, but it wasn’t easy.  Just a few weeks after the capsize this was the first time I had to find the words to describe what had happened and it was a very raw account of how we survived.  At the time of the accident the adrenaline kept me entirely focused and I am relieved about how I was able to act in such conditions.  However, it is afterwards that you have to come to terms with what happened, and to heal that mental scar. For the first eight weeks afterwards I had many highs and lows as I tried to rationalise what had happened.  I even spoke to a psychiatrist trying to deal with my mental roller-coaster.  I think this is worth sharing, as there is little value in being the hard man and pretending that nothing can touch us.  Phil Jones from Brother UK Ltd was at that London event and wrote a blog afterwards about how adventure is relevant to business.  http://www.philjones.biz/

The two most useful bits of advice that I can pass on for facing any set backs are: 

 1) Force yourself to see things as they are – don’t spin the facts to yourself or others.  Justifying or blaming will not do any good to anyone.  Facing and accepting the facts can be the hardest part of any set back. 

2) Don’t bury it – in our busy lives its easy to try to forget bad experiences, but they are there to be learnt from and will come back and bite you if you try to ignore them!

This is a fabulous life saving facility operating in the heart of London, and is the only air ambulance currently active in London. 

LDC’s London team will be supporting this charity throughout 2012/13 with a number of events and activities – the first of which really does take some courage…the abseil down the Broadgate Tower in the City of London on the 26^th April!!

Three members of LDC’s London team (all women I have to note…) have volunteered to join the 100 volunteers hoping to raise £30,000 for the charity.  It’s a big ask – it averages out at £300 per head, which I know is a big stretch. But every donation, however large or small, will make a difference. 

 Here is the link to the Just Giving web page: www.justgiving.com/TeamAshurstAbseilers

About London’s Air Ambulance

London’s Air Ambulance is the charity which runs London’s helicopter emergency medical service.  The service provides pre-hospital medical care to victims of serious injury, at the scene of the incident, throughout London – serving the 10 million people who live, work and commute within the M25.  

Based at the Royal London Hospital and founded in 1989, the service is unique in that it operates 24/7, with the helicopter running in daylight hours and rapid response cars taking over at night. 

The Team, which at all times includes a Senior Trauma Doctor and a specially trained Paramedic, perform advanced medical interventions, normally only found in the Hospital Emergency Department, in time critical, life threatening situations. Missions commonly involve serious road traffic collisions, falls from height, industrial accidents, assaults and injuries on the rail network.

London’s Air Ambulance has an international reputation for clinical excellence and delivers pioneering procedures which have been adopted across the world.  For more information take a look at: http://www.londonsairambulance.co.uk/index.php

Many years ago UK manufacturing and service industries adopted technology to improve productivity and automate the way they worked – and most are now well oiled, efficient machines. With approximately 50 per cent of the UK workforce currently employed in the ‘knowledge economy’ you would expect our mailrooms and back offices to be models of efficiency as well.

In most cases, however, this is far from the case, as Sam Ferguson, CEO of EDM Group, one of the UK’s largest providers of outsourced information management services, discusses. 

The fact is that despite the introduction of computer technologies, including Internet and email, an awful lot of business is conducted by post and phone.  Most of our offices and mailrooms function with piles of paper that move from desk to desk having information extracted, typed and retyped into the very electronic systems that were supposed to replace paper. These systems have become silos of information that have to be separately maintained and separately accessed – making it cumbersome to find answers that require data from disparate sources within the company.  Thus, the way businesses implement technology often makes it more of a hindrance than a help.

Competitor Advantage

The business technology industry likes to paint a rosy picture of completely paperless offices filled with employees executing complex processes at the touch of a button.  The reality is that most organisations will – at least for the foreseeable future – still require paper for certain purposes.  The key to implementing effective business technology is to look at the organisation’s strategic objectives, processes and compliance requirements to find a solution that facilitates efficiency.

The appropriate technology can take a variety of forms.  It may be that correspondence received from customers and suppliers by web, post, email, phone or fax is delivered to one inbox – where anything that isn’t already in electronic form is captured and has important data extracted so that it can be classified and handled regardless of how it was received. 

It may also include an element where all correspondence, inbound and outbound and including email, is converted into structured digital information that is stored in a secure electronic filing cabinet where it can easily be found – today, or in six years’ time.

It may even move to the next level where, based on the information captured, every piece of correspondence is automatically routed to the appropriate person or team based on skill, knowledge, jurisdiction and availability up until the item’s processing deadline.

The technology exists to achieve all of the above across organisational structures and time zones, unfettered by physical constraints such as location and logistics. Technology can identify who should handle items, what has to happen to them and where they need to go next. And to close the loop, it is able to reply to customers electronically or by post at the click of a button, without walking to the printer or putting the letter in an envelope.

The Three Keys to Efficiency

The correct solution should comprise three key elements: outsourced services, leading-edge technology and the skills and experience to apply them intelligently to deliver efficiency improvements.

For example, paper documents are digitised in outsourced bureau facilities and digital mailrooms; intelligent data capture and applied workflow software combine with web expertise to handle, store and route information from multiple channels; and business and technical experience is applied to integrate everything with existing manual systems and business IT applications.

Return on Investment

And it should be scalable across an entire organisation to maximise savings.  We have had the technology for many years, but only a handful of our 600-plus customers were previously brave enough to consider enterprise-wide information management across every department and channel. The progress of technology, speed of networks as well as the need for ever-tighter governance has resulted in most of our efforts now being engaged in enterprise-wide solutions.

The current business environment is incredibly challenging as organisations seek to remain agile while protecting the front line. Fortunately, the benefits of intelligent outsourcing and deployment of IT are both proven routes to achievement of strategic objectives, liberating organisations from manual tasks and arcane practices and delivering step-change improvements in efficient information management.

So, if you want a rapid return on investment at low risk, it’s time to consider the benefits of electronic document management.  After all, it could be the essential driver to delivering your competitive advantage.

EDM Group Notes:

• EDM Group employs more than 640 people working across eight UK sites. Its combined end-to-end information management services are trusted by more than 60,000 users in more than 600 organisations. 
• The company has the capacity to digitize 500 million documents per year, either hosting them securely online or physically storing them within the company’s secure records management facilities, which have 500 thousand square feet of storage and 50 miles of live file storage.
• EDM technology delivers documents directly to the desktop of the user best placed to process them.
• The company’s growing client base spans organisations from all sectors including financial services, public sector (central & local government and NHS), professional services, manufacturing, distribution, retail, pharmaceuticals, private healthcare, utilities and charities.
• To find out more about EDM Group please visit http://www.edmgroup.co.uk/

When looking at a new private equity investment, it is important to examine whether it has peripheral activities or units that could become a new company and whether the company has the capacity to offer new products or services. The crux of the issue is whether you can use existing assets to generate a new revenue stream. If this is possible, a spin-off is not necessarily the most appropriate course of action.  In deciding whether to create a subsidiary or simply expand the business in a certain direction, it is wise to consider the nature of the new revenue. But if it’s clear that there is a considerable shift in your customer base or drastic operational changes would be needed to capture the extra revenue streams, then spinning off a new subsidiary may be the right decision. 

Another key criterion is whether a standalone subsidiary will be more valuable to others. When we backed the buyout of Airclaims, the aviation insurance claims provider, in 2005, we separated its data valuations and consultancy business and injected it into a new company, Ascend. We split the data and valuation business from the loss-adjusting and technical inspection business and sold the company to the publisher Reed Elsevier. Would a publisher have wanted the technical and adjusting units? No. But as a business already providing a wealth of aviation business intelligence, Reed was naturally very keen on the Ascend data business.  In the autumn we sold the parent, Airclaims, which was illustrative of the transformative power of incubating and spinning out.

Pitfalls to avoid include being mindful of how to spin out a subsidiary without damaging the parent company and as with any new company, a spin-off will often need follow-on capital to make it profitable. Also at the beginning of the process, when identifying possible revenue streams to spin out, it may be necessary to overspend part of the budget in that area.

The process of identifying a new revenue stream in an investment that will sustain a successful subsidiary is complex, although often identified pre-investment, but the potential enhanced exit value is great. In short, the arduousness of conceiving and nurturing a new company is far outweighed by its potential rewards.

BUCS 2012

The last two months have gone really quick for me and a can’t quite believe that I am going to be jetting of to LA next week (21st March).

Training has been going really well and we have been dong some quicker track sessions,  which I always prefer. I completed my last fartlek session for the winter and now we are moving onto hurdle sessions instead on a Saturday which I always like. I do weights seasons twice a week which include cleans, squats, bench, and other general conditioning exercises. I do less of each of the exercise but at a heavier weight. This suits me a bit better then doing a lot of repetitions. I also have started doing less biking and longer runs.

This winter we have been very fortunate with the weather. I haven’t had to miss a session due to the snow or the icy track which is a great improvement from last year. Let just hope that the next 3 weeks stays nice. I have been enjoying the lighter evenings as well, as its never nice coming back from training in the dark!

I competed in a few indoor races. I started doing the 60m hurdles in January. I was hoping to do a few more races at this but due to a niggle in my knee my coach and I decided to back off this. I then did the 400m which I was happy with. I only did 2 races and ran an indoor PB so I can’t complain. I finished my indoor season with BUCS (British University Championships) 200m where I successfully defended my title. I always get a little more nervous when I am in this situation. Our team Loughborough university won the 4×200 also.

I am going to be in LA for 5 weeks for a training camp, this is a good opportunity to start doing some speed work. I will have to study as well as I have an exam two days after I get back. I will be racing a couple of times in LA and then will be back to run the BUCS outdoor competition which will be at the Olympic Stadium!

Editors Note: Supported by LDC Meghan Beesley is a promising 400m hurdles and 4 x 400m relay runner. She has represented England, and with training is aiming to be part of the Great Britain team at the London 2012 Olympics.

One of the key factors behind the trend is that the availability of debt still remains scarce. Typically in larger deals the model is to focus on stable, mature businesses, gearing them up and then making incremental improvements in profits that feed straight through to enhanced shareholder value. This is difficult to execute in the current climate, particularly when debt is still not easily accessible.

While credit conditions had eased a little in 2009 and 2010 with the willingness of providers to lend again and also to trim their interest rate expectations, last year saw conditions tighten again as the Eurozone’s sovereign debt crisis took hold.

So given the difficulties in executing their traditional models, what the bigger houses are trying to do is to replicate the kind of returns in the mid-market that they achieved, often with financial engineering playing a bigger role on larger buyouts. To achieve this, larger houses will have to adapt their models to rely more, as mid-market houses do, on identifying fast-growing businesses or companies where better performance can be generated – mainly through operational rather than capital or financial improvements.

The good news for both the larger and mid-market houses is that the UK has a well-developed SME sector and many SMEs are performing well in difficult circumstances. SMEs provide close to 60% of all private sector jobs and generate some 50% of the private sector’s total turnover of £3,200 billion. SMEs are particularly strong in innovation, accounting for some 65% of all patents registered in the UK. They are also making a strong contribution to the UK’s export recovery. UK small and medium-sized businesses are leaders in sectors such as Healthcare where a number of SMEs have world-leading products (for instance in monitoring and home care devices), and TMT, in areas such as web hosting and cloud technology, many based on London’s Silicon Roundabout.

Given the likelihood that economic conditions in the UK will not dramatically improve certainly over the first half of this year, I think the factors behind the rise in the trend of larger houses moving into the mid-market will persist. At LDC, with our 30-year track record of investing in the mid-market, we believe that SMEs will benefit from this interest which in turn will raise the opportunity throughout the sector.

Note – For a copy of the most recent Unquote-LDC Mid Market Barometer about private equity transactions in the UK market CLICK HERE

So what is going on in the Aviation industry across the world? In the first seven weeks of the year, we have had two fairly significant (and two other) European insolvencies, a profits warning from flyBe, but very strong financial performance from Easyjet and Ryanair, and a continuation of orders and strong traffic growth from the usual suspects in the Middle-East, Asia and Latin America.

On the face of it, one could attribute most of the above to the travails of Europe and its consumers as a region, but with IAG (British Airways and Iberia as merged) performing well, and easyJet and Ryanair performing strongly (which are both fundamentally European in outlook), this can only be part of the answer. So what is really going on and is the global commercial aerospace industry likely to gain or lose momentum as a result?

First the demise of Spanair, the largest of the European casualties, is testament to a number of themes which have dominated the industry for a number of years. Spanair was neither a national flag carrier, nor a low-cost airline. Its origins were as a charter off-shoot of SAS (Scandinavian Airlines) in the early 1990s operating to the Balearic and Canary Islands and some mainland Spanish leisure destinations. Initially, it was squeezed by the other Northern European charter airlines offering scheduled services to Spanair’s destinations (often using larger aircraft). Next came the low-cost revolution, with airlines like EasyJet, Ryanair and Air Berlin, with vastly superior cost bases, putting significant capacity into the key Spanish mainland and island destinations. The final straw was greater competition on intra-Spanish roots, coupled with weakening demand from an increasingly stretched Spanish population. Last minute attempts to bring Qatar airlines in as an Angel investor failed.

Malev, the Hungarian national carrier was a slightly different story. Again, the “state of the nation” in Hungary and disposable income dynamics of its population were contributing factors. Nevertheless, Malev was a case that proved that while the likes of BA, Lufthansa and Air France/KLM can survive the onslaught of the low-cost carriers (primarily as a result of their long-haul hub and spoke network, business travellers and lead roles in global alliances), this is a far tougher goal with a route network which is predominantly European and has in volume terms increasingly become the preserve of low-cost airlines. Ryanair’s announcement of in excess of 20 new routes from Budapest in the last few weeks will ensure that Malev is highly unlikely to return to the skies.

Alongside these insolvencies, Europe’s largest regional airline, FlyBe, having given a gloomy outlook in its interim report in November, followed this up with a January profits warning, blamed primarily on weakening demand from its strong position on UK regional domestic routes.

So its all doom and gloom then? Well not really, as other parts of the world are delivering significant growth, in terms of both air travel and new aircraft orders. Year-on-Year Revenue Passenger Kilometres (RPK’s – the most basic measure of the volume air travel) are up by circa 8% year-on-year (2011 vs 2010) for China and 10% for the Middle-East and Latin America. On the OEM side, there have been a number of highly significant orders from Asian and Middle-East carriers over the last few months including: 200 Airbus A320 Neo ($18bn list price) from Air Asia, a leading South-East Asian low-cost carrier; a further 50 Boeing 777-300 ($18bn) and 32 Airbus A380s from Emirates ($11.5bn); and as recently as last week, Boeing’s secured its record order for 230 Boeing 737 aircraft ($22.4bn) from Lion Air, an Indonesian low cost carrier.

And its not just Asia and the Middle-East that have been on the order bandwagon. Norwegian, Scandinavia’s leading low-cost carrier, recently ordered 122 Boeing 737s ($11bn) as well as signing a MoU with Airbus for 100 Airbus A320 Neo’s. All these contribute further to the very long order book which both Airbus and Boeing hold.

Easyjet and Ryanair both recently announced very strong quarterly results for the final quarter of calendar year 2012. Easyjet’s revenue was up almost 17% on the prior period (albeit the prior comparative period was impacted by snow closures in the UK and Europe) with yields (revenue per sector flown) improving by almost 10%. Ryanair’s passenger numbers were down (see fleet grounded point below) but yield was up 17% year-on-year. This represents significant progress for both airlines in what is typically their toughest quarter, more so given the tough European consumer environment, and is a testament to smart capacity management (Ryanair has over 25% of its fleet grounded this winter) and efficient operation.

For the aviation industry, the events of the last few months demonstrate just how tough it is likely to be for airlines without contracted revenue that have a business model which sits somewhere between the low-cost model, and the national flag carrier/global alliance hub and spoke model based around long-haul networks. This will be particularly true for airlines operating in Europe and to some extent the US where the consumer is likely to be under greatest pressure.

While the 29 strong fleet of Spanair and 22 of Malev will take a little while to be subsumed into the market, this is a side-show. The outlook for the segment of the industry which supplies new aircraft has rarely looked better. Both Airbus and Boeing have an order book lasting for in excess of seven years, the majority of which (by value) is in the hands of airlines in aviation economies which are growing strongly. Aircraft retirements are increasing significantly as the delivery boom from the 1980s and 1990s come up for replacement, and the cost of fuel and carbon legislation drives the industry to more efficient aircraft.

So, to answer the original question, there is more “boom” than “bust” in the industry, and the demise of airlines is just a continuation of the “survival of the fittest” theme in an ever evolving industry. The most significant threat to this boom is the price of aviation fuel, which as a result of its increased cost and other efficiencies achieved in the cost structure of airlines, is now a much higher percentage of an airline’s cost base than ever before. By the time we reach the end of 2012, the most profitable year for airlines as a whole in the prior five years will have been 2009 – in an industry whose prime driver is the disposable income and financial well-being of its customers.

Notes: In 2010 LDC launched a £200m three year commitment to the specialist engineering and manufacturing sector. Since launch LDC has invested in PJD, Benson Box and continues to support a significant number of other businesses in this sector including Aim Aviation, MB Aerospace, NESL, A-Gas and Kee Safety

A starting point is that management need to get their macro analysis right. Any sector needs to have the right conditions and a consistent approach. The four main areas to consider are:

• market stability and in particular pricing issues
• product and customer synergies
• operational overlaps
• supplier fragmentation

With the pricing issue for instance, price volatility can make modelling and forecasting the benefits of any acquisitions more problematic whilst supplier fragmentation means that consolidation offers real cost saving and service enhancement benefits.

Management must develop a coherent strategy for its acquisitions. Buy and builds work best when the approach supports strategic growth that enhances a services or product offering to an existing customer base from which additional commercial value can be obtained, or provides a compelling offer to a new customer base.

Having decided on a strategy, management have to then decide how to finance it, consider their best funding options and put together an acquisition finance package for companies pursuing a buy and build strategy.

In implementing the strategy it is important to ensure that the right companies that are being targeted. Often management can be dazzled by companies with good brands or reputations in their sector, or those that are growing quickly, perhaps in the hope of discovering what business alchemy they have conjured up to emulate their success instead of focusing on companies that will really improve their service.

Once a company has been acquired it is important to focus on developing a chemistry with the incumbent management team. Don’t to assume their trust and confidence, but be sure to engage early, inform them on any outline plans and consider their thoughts and opinions. Transparency and trust wins their support for the strategy.

Plenty of pitfalls exist in implementing a buy-and-build, but if companies keep these essential factors in mind they should reap the considerable rewards such a strategy can deliver.

Notes

LDC is a supporter of Buy and Build opportunities. Over the past 24 months the LDC team has supported a number of ‘Buy and Build proposals – including Angel Springs, EDM, Microlease and Kimberly Access.

On the 30th January at 11.00am the Sara G capsized.

Its crew included Captain Matt Craughwell, Ian Rowe, Aodhan Kelly, Simon Brown, Yaacov Mutnikas and Mark Beaumont – all six members safely exited the overturned boat.

Sara G was hit by a large wave 1.5 minutes before the rowers completed their shift change which was performed on a two hours on – two hours off basis. The wave rotated the vessel 180 degrees causing it to immediately take on water causing it to capsize within ten seconds.

In the next fifteen minutes the crew secured the life raft and attached it to the boat. They set-off their alerting alarms which initiated a response from Falmouth Coast Guard.

The crew did try to recover the vessel but due to the speed of the water retention, this proved unsuccessful.

The crew spent approximately three hours recovering on the raft before Matthew Craughwell and Mark Beaumont returned to the vessel to recover equipment to aid the rescue attempt.

At 1.10am on the 31st, the crew were rescued by the Nord Taipei, a Panamanian-flagged cargo ship and proceeded to Gibraltar where they arrived safely on February 9. 

The crew were magnificent throughout their record attempt and in the professional way they handled an extremely stressful and life threatening situation. The Atlantic Row is one of the world’s greatest physical challenges and ultimately they were at the mercy of the unpredictable nature of the sea which unfortunately resulted in the vessel capsizing.

Everyone at LDC sends the team their best wishes, our admiration for your efforts and professionalism remains undiminished.

By mid-2012 we do believe there will be an increase in demand for development capital, particularly among mid-market companies, triggering some investment competition from funds, many of which have been sitting on cash for the past few years waiting for a propitious moment to re-enter the market.

Businesses with ambitious management are increasingly eager to approach private equity houses for management buyouts largely because the economic landscape in 2011 proved far less rosy than expected. Moreover, some businesses are not convinced that holding onto their assets will necessarily increase revenue further down the line. Therefore, even if there isn’t significant improvement in economic conditions throughout the first half of 2012, many businesses will still press ahead to pursue transactions as the year progresses.

While the proportion of deals led by private equity firms last year seemed to diminish in favour of corporate trade buyers, we believe this will be reversed in 2012. Corporates became increasingly competitive in the mid-market acquisitions market during 2010 and 2011. Just as there was a decline in availability of cheap debt and reduced levels of leverage accepted by lenders in buyout deals, corporates which had strengthened their balance sheets during the financial crisis emerged as more competitive rivals in the hunt for deal opportunities.

Sharp deterioration in business confidence since the summer has, however, forced many would-be trade buyers to become cash hoarders once again, leaving an opportunity in early 2012 for forward-looking private equity firms to regain initiative and invest in growing businesses led by strong management.

In terms of exits, there is no evidence to suggest that the volume of transactions will dwindle in 2012. Over the next 18- to 24-month period we expect a flurry of potential exits as mid-market private equity strengthens. While the exit environment will remain somewhat constrained because of continuing uncertainties in the global economic environment, good businesses with proven management will still attract new finance and ownership.

Note – In 2011 LDC completed 17 new business transactions investing over £300million of equity, and in addition committed over £60million in two funds, and supported a number of companies with their acquisition and ‘buy and build’ programmes. LDC’s most recent transaction was the MBO of Pertemps Network Group.

Earlier this week the UK’s Court of Appeal upheld a High Court ruling that the government cuts to the feed in tariff for solar projects was illegal. At first glance this appears to be a victory for the solar industry – cue much cheering from solar companies and supporters of renewable energy and all things green.

And yet….and yet, the response overall is fairly muted. And, I hate to say it, perhaps rightly so. 

When one stands back and surveys what has been achieved, there is sadly little to celebrate: the reduction in the Feed in Tariff or “FiT” will still take place from 3^rd March; there will be little opportunity to ramp-up new installations between now and then; the industry which sprung up on the back of the original, attractive, FiT levels has already packed its bags, de-camped and gone away; and, most damaging of all, the UK’s reputation as a safe place for renewable energy companies to invest in, has already been severely damaged, if not shattered.

Perhaps there is also even worse news: from reading the detail of the ruling, it is important to note that the Court of Appeal did not opine on whether the reduction of the FiT was too much (50% for the most attractive rates), nor that the suddenness of the reduction was wrong (it took place while the Department for Energy and Climate Change (“DECC”) was still consulting on future tariff levels), nor even that it was retrospective. No, what was illegal was that Parliament had not made any allowance in the Energy Act to empower the Secretary of State to make the changes when he did.

What this says to me is that the government was caught out by a technicality in the drafting of the law. From my experience of contract drafting, once there is found to be a flaw in some wording, lawyers will then amend these documents in the future to correct it. In other words, it will not be a surprise if the government makes very sure that the next bill they enact has a clear provision allowing them to make ad hoc changes to FiTs whenever they want, at a flick of the Secretary of State’s pen.

If this is the case, then this week’s ruling could be seen to be a truly Pyrrhic victory, as it will create even greater uncertainty in the future for investors. Who would choose to invest in an industry, on a long term basis, when the government can reduce one’s revenues at any time, whether because of perceived cost reductions or sheer political whim?

This is my greatest concern for the long term consequence of this week’s ruling, even if it is an unintentional result.  However, if there is a ray of sunshine, it is that the solar industry’s costs are continuing to reduce.  While subsidies and FiTs are still needed at present, if the industry can continue to evolve to the point where no subsidy is required, then that is an industry which will be highly attractive to investors, for the long term. Political risk? No longer applicable.  Grid parity for the solar industry is just beginning to appear possible in one or two markets, but hopefully this is just the start and the industry will continue to progress so that this becomes a reality in the very near future, even in the UK.

Now that will be a result worth celebrating!

Notes: Mark joined LDC in 2011 and leads the Cleantech and Environmental sector coverage in London. Previously Mark was with Investec in London where he was head of the Power and Renewable Energy team. His transaction experience encompasses numerous equity, mezzanine and project financings (both large and small) across the globe and he has published many industry articles. Before this, Mark was an energy banker at Société Générale and Dresdner Kleinwort Benson.

In association with StartUp Britain, Mischcon de Reya and Baker Tilly, LDC is supporting a  master class aimed at helping companies looking for potential funding options. The full details are provided below:

Free legal master class for growing companies: raising money in difficult economic times

Essential tips to maximise your potential funding options

Content Essential tips to maximise your potential funding options
The master class will discuss the options, and how to improve your chances of success:

• Business Angel
• Venture Capital 
• MBO 
• Top tips from the inside – the venture capitalist’s perspective�
  • What works and what doesn’t
• 99% perspiration / 1% inspiration
  • Be prepared – due diligence is key
• Business plan/pitch documents�
  • Make or break…your chances of success 
  • Follow the money…

This session will be followed by a 30 minute Q&A.

Chaired by Andrew Rimmington, Partner, Corporate Department – Mishcon de Reya

Panellists:

• Duncan Cheatle, Co-Founder of StartUp Britain and Founder of the Supper Club
• Kevin McCarthy, Head of Private Equity – Mishcon de Reya
• Tim Farazmand, Managing Director – LDC
• Rowan Williams, Partner – Baker Tilly 

When: Wednesday 8 February 2012, 8.30am to 10.30am (breakfast from 8.30am)

Where: Mishcon de Reya, Summit House, 12 Red Lion Square, London WC1R 4QD

To secure your place at this event, click here

Directions to Mishcon de Reya

Add this event to your calendar

Birchfield Harriers, based in Birchfield is the UK’s premier athletics club and has been represented at every summer Olympics bar one since 1908. Based at the Alexander Stadium in Birmingham they have access to a High Performance Centre, an indoor facility which provides indoor training for a range of events including long jump, triple jump, high jump, shot putt, and pole vault. Their aim is to get 12 of their athletes into the 2012 Olympics. 

LDC is supporting Jade Perry (Hepathlon),  Katie Stainton (300m hurdles), Melisa Hanson (100m and 200m), Jake Porter (110m Hurdles) and Rowan May (Pole Vault). See the below profiles to find out more:-

		Jake Porter 110m Hurdles Jake is an U20 athlete and has won national titles and English titles in the sprint hurdles. His major goal for 2012 it selection for the World Junior Championships.
		Melisa Hanson – 100m and 200m The highlight of Melisa’s 2011 season was winning the English Schools Championships. She suffered a hamstring injury the end of the season but is now back in full training and hopes to lower her current personal best of 11.83 seconds.
		Rowan May – Pole Vault Rowan is a highly tamented pole vaulter who in his first season as an U17 won both the U17 and U20 outdoor championships and the U17 indoor championships where he set an age group record of 4.91cm. he was selected for the World Youth Games in 2011 and is looking to break the 5m mark this season.
		Katie Stainton – 400m Hurdles Katie moves into the U20 age group in 2012 where she will move to the 400m Hurdles from the the 300m hurdles. She has won a number of titles at this event and was the bronze medallist at the English Schools Championship.
		Jade Perry – Heptathlon Jade is following in the footsteps of many successful Birchfield Harriers heptathletes including denise Lewis, Kelly Sotherton and Louise Hazel. She is looking forward to a successful season as she continues her improvement in the U20 age group.

Week one of the record attempt has not been without some success…rowing 701 miles and staying ahead of World Record time being top of this list…but sea sickness, fatigue, bruising and blisters…and a distinct lack of trade wind support has put the crew of Sara G under extreme pressure.

Starting their row from Tarfaya at 1pm on the 2nd January despite a last minute customs hitch the crew were out of the traps pretty quick completing over 100 miles in their first day. Thereafter progress was hindered by difficult seas and a lack of wind support.

A number of the team suffered from sea sickness which hampered their ability to eat and sleep (and row effectively). Each team member will use up to 12,000 calories every 24 hours but with the crew unable to eat more than 2,000 calories a day during the first few days this placed a strain on the team’s strength. Whilst the ‘getting your sea legs’ aspect was expected the severity of the first few days was not!

The team have now settled into their 2 hours on 2 hours off routine with the sessions during the night proving to be the most difficult psychologically. Rowing in the dark with your back to the direction of the boat and not being able to fully see the direction of the waves has been pretty disconcerting for the crew.

Simon, Aodhan and Matt

The Atlantic Odyssey challenge has already attracted the attention of a large following not least of which because they have been able to send back regular voice blogs (courtesy of iPadio), and take part in a number of phone-ins (particularly with Heart FM Breakfast show – as they are undertaking the row in support of Heart’s Childline appeal), and Mark continues to blog for the The Independent Online.

The description of the first few days was summed up by crew member Ian Rowe who described tjhe journey thus far: “Think of a washing machine, place a boat in it and turn it on, then bash your legs and knees with a baseball bat…now you have some idea of what it has been like!”

The journey is compelling and can be followed at www.atlantic-odyssey.comand via their http://twitter.com/AtlanticOdyssey. Please send messages of support to them via their Get In touch section and any donations to Childline would be most welcome.

L-R: Matt, Aodhan, Simon, Yaacov, Ian, Mark

At 1pm on the 2nd January the Atlantic Odyssey crew set off on their East – West Atlantic row record attempt from Tarfaya in Morocco to Barbados.

They are attempting to row across the 3,000 miles of ocean in less than 30 days!

The team of Matt Craughwell (skipper), Mark Beaumont, Ian Rowe, Simon Brown, Yaacov Mutnikas and Aodhan Kelly play to row 100 nautical miles a day, via a strict regime of 2 hours on and 2 hours off the oars. Clearly this is not for the faint hearted and one that will test the mental and physical reserves of all those involved.

To put this all in perspective, the first ocean row was undertaken by two Norwegians, Frank Samuelsen and George Harbo, who rowed an open wooden boat from New York to France in 1896, but it would be another seventy years before the next ocean row in 1966, when John Ridgeway and Sir Chay Blythe succeeded in rowing from Newfoundland to Ireland.

And amazingly up until 1988, only 19 people had ever rowed an ocean.  Now, there have been over 500 but strangely 321 of these have been Britons – so it seems that the adage ‘mad dogs and Englishmen’ applies to the whole of our island!  For 500 people to have rowed an ocean sounds quite a lot, until you consider that over 3000 people have stood on the top of Mount Everest!

Sara G in Agadir

The first ocean rows were undertaken without any modern technologies and communications.  They had to carry all the water they needed for their entire journeys and were truly tenacious and pioneering voyages.  Gerard d’Aboville (1896-1982), who rowed the Atlantic, once said about these early crossings, ‘We were like test pilots, but without a parachute.’

The crew on this record attempt will be rowing in ‘Sara G’ an 11 metre boat, and the vessel in which the current world record was set.

The crew for his present challenge were selected from nine rounds of sea trials that began in April 2011. Their attempt will be fuelled by each crew member consuming between 5000 and 6000 calories every day, while expending somewhere close to 12,000 calories a day.

The team’s website said of the challenge: “Of the countless teams that have taken to the Atlantic trying to set the fastest time ever, the sub-30 day barrier has so far remained elusive. The first team to break this barrier will achieve, what has seemed for many involved, the unassailable mark in the sport’s history. We have a huge range of experience in the boat and come from many different backgrounds, but the stand-out fact for each member is their rowing history.”

Over the course of the journey the crew will be sending back regular blogs and pictures, and Mark will be writing exclusively for The Independent.  In addition the crew will be able to send back brief voice messages through iPadio. To hear Matt’s departure messages click here:

Atlantic Odyssey Channel – 5th phonecast http://ipad.io/niV

Full details about the attempt can be tracked via www.Atlantic-odyssey.com and their dedicated twitter feed http://twitter.com/AtlanticOdyssey

Winter training is going really well for me this year! It’s the first time I have not been held back by any injuries or rehab so I am feeling fitter than ever. 

In September we all have a nice break from training. This is the time of the year where I can do as please and eat what I want without feeling guilty! This year I went to Rhodes with my friend Abi! We met some good friends there who were nice, and I came back with a great tan. 

Then it is back into hard training which is always a shock. During October and the start of November I did mostly general fitness which included longer runs (such as 30 minutes), circuits, grass running (which is interval training of between 1 and 3 minutes) and Fartlek (running on a muddy field for about 90 minutes doing different speeds). This is the first year in a while I have been able to complete all these training sessions so actually enjoyed it for the first time ever.

Over the past 6 weeks we have started doing some Hurdles technical work (which always breaks up training as this is fun) and our lactic tolerance sessions which is very important for 400m running. These lactic sessions are usually between 200m and 400m, and an example of this would be 2 sets of 3x300m. This is the big sessions we do in the week and everyone gets very nervous for this as we have target times given to us by Coach Dakin.

This time last year we were really struggling with the weather and the track had been iced over for weeks but so far the weather has been kind to us. So hopefully January will be as nice as this year I am not going warm weather training. 

I am looking forward to Christmas as we do have slightly easier sessions for the week between Christmas and New Year although we don’t have an actual break. This year as Christmas Day off as it’s a Sunday, but our group always have a Sunday off every week. Not sure what happens next year as its Tuesday. 

Only another month and the indoor season will have started which I am really looking forward to as I had to miss it last year. I will be sharpening up my hurdling and concentrating on sprint hurdles. My first race will be at Loughborough, it is always nice to compete on my home track. 

Merry Christmas and Happy New Year!

Editors Note: Supported by LDC Meghan Beesley is a promising 400m hurdles and 4 x 400m relay runner. She has represented England, most recently at the Commonwealth Games in Delhi where with the relay team she earned a silver medal, and with training is aiming to be part of the Great Britain team at the London 2012 Olympics.

On New Year’s Eve, as you toast the start of 2012, spare a thought for a small boat and six men setting out across the Atlantic Ocean!  Once again, I am embarking on a journey that’s very viability is doubted by many. We aim to be the first to row across the Atlantic in less than a month. And once again, LDC are a part of the team.

LDC shares my level of ambition and enterprise – they have backed my expeditions over the past five years and it has been great sharing the trials and ultimate successes. Expeditions and documentary making are a very different world to private equity, but we share the same ambition in making big ideas happen.

You can follow our teams progress over the 3,000 miles from Morocco to Barbados through www.atlantic-odyssey.com from where you can see the progress map, hear our audio updates and read my blogs for the Independent.  You can also follow the whole campaign on twitter @AtlanticOdyssey or on Facebook at ‘AtlanticOdyssey‘.

The bare facts are that we will be rowing in 2 teams of 3, on 2 hour continuous shifts – so we will be sleeping for less than 2 hours at any time and will each be rowing 12 hours a day.  During the month’s crossing we expect to lose between two and three stones of weight each – it’s impossible to replenish all the energy we will use.  We are unsupported and will be relying on daily weather reports to find the strongest patches of trade winds to ensure the fastest crossing.  We have a fast boat and an experienced crew, but to break the 30 day barrier for the first time relies on the weather playing its part!

Enjoy following the campaign over the coming months and here’s hoping we have reason for a big welcome home, ‘World Record’ holder’s party in February (we hope!), which you will be welcome to.

Note: The full story can be followed at www.atlantic-odyssey.com or via twitter on @AtlanticOdyssey (hashtag #Atlantic3000); and Mark’s personal online feed is via twitter: @MrMarkBeaumont and on his web site http://www.markbeaumontonline.com/