£80m buyout for Leasedrive Velo
01 September 2008
Author: Tristan Young
Privately backed fleet firm Leasedrive Velo has carried out another management buyout valued at £80m.
The deal sees private equity firm Lloyds Development Capital (LDC) take over from the previous equity partner Lyceum Capital just over 18 months after it supported the merger between Leasedrive and Velo.
Although LDC takes a reduced stake in the business compared with Lyceum, LDC will retain what is believed to be a 52% share of the new business that will now be known as Leasedrive Velo Group.
Debt and vehicle asset finance facilities to support the deal are now provided by The Royal Bank of Scotland.
The senior management team remains the same with Roger Partridge as chief executive officer, Roddy Graham as commercial director and David Bird as chief operating officer.
Explaining the deal, Graham said: "We always get a lot of interest in our business, which is nice. It's effectively structuring a new business when you do this.
"Both RBS and LDC are keen to support expansion, but there's nothing in mind at the moment. I don't know if we're going to make an acquisition in the future, but we won't rule it out if the right thing came along."
Partridge added: "This new deal bucks the trend within our industry and demonstrates the confidence both we and our backers have in the future of this company. Indeed, the senior management team has significantly increased its equity and shareholding in the new company.
"Lyceum Capital, the private equity company, which had originally acquired Velo in 2003 and who became the majority stakeholder following the merger of Leasedrive with Velo at the beginning of 2007, had been keen to sell its interest following the successful integration of the two companies.
"We successfully secured the support of LDC and RBS despite the tough economic climate. LDC is one of the UK's foremost private equity specialists who have tracked us for some time while RBS really needs no introduction. It tried to back our original BIMBO [Buy In Management BuyOut] transaction in May 2003 and the merger between Leasedrive and Velo in January 2007. For the bank, it's a case of third time lucky! However, the fact that we have secured the backing of two major financial institutions underlines the faith they have in our future and the strength of our business."
LDC are thought to be working to a three- to five-year plan before it sells its share of the business on.