LDC has acquired UK vehicle management group Leasedrive Velo, in an Gbp80 million secondary buyout from Lyceum Capital.
Leasedrive Velo, one of the UK’s largest independent vehicle management groups, has been acquired in an Gbp80 million secondary buyout from Lyceum Capital by private equity house LDC, which has backed the management team of CEO Roger Partridge, commercial director Roddy Graham, and CFO David Bird.
The Wokingham-based company provides a full range of services including fleet management, contract hire plus short and mid-term vehicle rentals. It works with a diverse national customer base of largely blue chip organisations such as PricewaterhouseCoopers, British American Tobacco, Samsung, T-Mobile, John Lewis Partnership and Eli Lilly.
As part of the deal LDC has made a significant investment for a majority stake in Leasedrive Velo with Kevan Leggett and Richard Stewart joining its board. Debt and asset finance facilities were provided by The Royal Bank of Scotland.
Following the transaction LDC and management will focus on driving further growth in the contract hire and fleet management services division of the company, as well as continuing the expansion of the significant short and mid-term rental business. The strategy is set to increase the business’ ?62million turnover by over a third during the next two years and increase its share of the ?10billion fleet management service market.
Established in 1983, the current management team transacted a debt-only BIMBO of Leasedrive in 2003. In January 2007, Lyceum Capital acquired the business and merged it with Velo, a nation-wide fleet management business that it had been developing since 2003.
Lyceum Partner, Dan Adler, said: “The merger between Leasedrive and Velo at the beginning of January 2007 demonstrated the strength of combining two high quality mid-sized players to create a market leader in a niche sector. Merging companies is never simple as it involves many factors, but having identified the synergies between the two companies, the merger bedded down well.
“Now the company has consolidated and established its market position, it is time for it to move to the next stage of growth with another investor. We have enjoyed working with the team and wish them well as they continue to build the company.
“Since our initial investment in Velo in 2003, the group has increased profits fivefold through organic growth, expansion of the range of services and the successful merger with Leasedrive. This merger enhanced the group’s UK-wide coverage and further developed the range of tailored services for the group’s blue chip customers.”
Roger Partridge, CEO of Leasedrive Velo, added: “Over the past 18 months we’ve focused on successfully bedding in the merger and this deal gives us fresh impetus to maximise the full value of the sales channel synergies that have been created. As well as the ability to fund our future growth, LDC is a locally based, pragmatic and supportive funding partner which will be actively engaged post-deal. “This will be crucial as we look to capitalise on a fleet management service market which is worth around ?10billion per annum.”
Kevan Leggett, managing director of LDC, said: “Leasedrive Velo has built a quality reputation which is a key differentiator in this competitive and growing market. We were particularly attracted to its differing sources of revenues which provide the business with significant downside protection.
“It has built a high quality client base not only by developing unique technology platforms and innovative products, but by providing a level of service and support which is far higher than the industry standard.
“We’re backing the outstanding management team that is responsible for this and which has already demonstrated its ability to build shareholder value by successfully delivering on two transactions, including a complex merger.”