Lloyds TSB development capital expands with Scotland office

Lloyds TSB Development Capital (LDC), the bank’s mid-market private equity division, has announced plans to establish a dedicated new business team in Scotland as part of its continued expansion.

LDC – which has a presence in 10 regional centres outside of its London head office – is currently recruiting for senior investment professionals who will be based from new offices in either Glasgow or Edinburgh.

The move supports LDC’s commitment to being the UK’s most active mid-market private equity house in the £5million to £250million deal range with the largest regional network.

LDC already has a track record in Scotland, with recent private equity backed investments including the management buyout (MBO) of Lanarkshire-based engineering firm MB Aerospace from Motherwell Bridge and Telecom Service Centres (TSC), the Stirlingshire-based call centre operator.

Grant Berry, UK Regional Managing Director of LDC, said: “We’ve always had the ability to support transactions in Scotland but we felt the time was right to increase our commitment and strengthen our presence.

“It’s an important economy with a rich heritage of entrepreneurial corporate and family-owned businesses and a well-established corporate finance network. Along with our colleagues in Lloyds TSB Scotland, these are the people we want to work more closely with – the first step is setting up on the ground so we can form a real part of that community and hopefully stimulate activity.”

Data from over the last five years shows that the Scottish market sees around 12 transactions complete every year in the £5million-£250million range – LDC’s main focus. These are predominantly buyouts or expansion capital deals with an enterprise value of under £50million, a particular strength of LDC’s.

Berry added: “Our business model is predicated on having a strong presence in regional markets and their local communities. As a mid-market player, this is where the majority of our deal flow comes from and it’s a strategy that has paid dividends in other key centres where we’re now amongst the most active players.

“We’re actively recruiting senior investment professionals to lead our investment team there and bring our relationship-based approach to the market. We expect to open officially in the second half of this year.”

Manus Fullerton, Director of Corporate and Commercial Banking, Lloyds TSB Scotland, said: “Following six years of strong growth in the corporate and commercial sector, we believe the time is ideal for LDC to establish a presence alongside the Bank here in Scotland. We have steadily added to our capabilities, offering an ever wider range of services which we deliver locally. LDC will further enhance the service we offer our customers in Scotland from Scotland.”

So far this year, LDC – part of Lloyds TSB - has invested £122million across seven transactions, including the £67million MBO of South Wales based Penn Pharmaceuticals and the MBO of Birmingham based Cable Management Group.

It is targeting £250million of new investment in 2007 and a profit before tax in excess of £100million.