A recent blog by our members LDC discussing how the North East SMEs can unlock growth post-pandemic.
As we emerge from the pandemic, local businesses are reviewing their priorities and considering new opportunities for growth. Here, we explore how business leaders in the North East can identify the best strategy to realise their ambition and prepare for expansion.
Gareth Marshall leads the North East team at leading mid-market private equity firm LDC, which opened its Newcastle office in February 2020. He has more than 16 years’ experience of backing ambitious management teams of medium-sized businesses, working closely with them to support a range of successful growth strategies.
Avenues for growth
There are plenty of avenues to growth to consider as the economy recovers, whether it’s organic, international expansion or making complementary acquisitions.
However, before proceeding with one of these avenues, a management team must first have a clear strategy in place to ensure the path it chooses is deliverable. Take international expansion – if a business is looking to grow overseas, it’s essential that its management team considers the key markets and routes into those markets.
Once the team has identified an opportunity for growth in another country, a region-specific sales and marketing strategy is a great place to start. However, a bolder method to establish a permanent foothold in a new overseas market is to open a new office or even to acquire a local business. This is where a private equity partner can add real value.
An example is our partnership with NBS, a market-leading provider of technology, content and data services to professionals in the architectural, engineering and construction industries.
In 2017, the Newcastle-headquartered business employed 200 people and had a turnover of £20.5m, but wanted to accelerate its international growth plans. During our three-year partnership, the team expanded its presence internationally, opening new permanent bases in both Australia and Canada.
The pandemic has also created new opportunities for businesses to grow, as many business leaders want to consolidate their market position, or acquire a competitor to build additional resilience and scale.
Northumberland-based Mandata – one of the UK and Ireland’s leading transport management software providers – is a prime example of a business which has grown through acquisitions over the course of the pandemic. Since 2018, we’ve helped CEO Chris Rigg and his management team to accelerate organic growth.
In January, the business significantly strengthened its service offering by acquiring Stirling Solutions. The move combined the expertise of two of the longest established software providers in the sector. Together, the Mandata Group is now serving 2,000 customers through its 120-strong employees and offers the best integrated transport technology in the market.
We know how effective acquisitive growth strategies are in creating value. In the first half of 2021 alone, LDC supported portfolio companies across the UK to make more than 35 acquisitions.
Bringing on board additional expertise
For leaders of small and medium-sized businesses, it can be daunting to pursue these growth strategies alone. While management teams know their business better than anyone – bringing in people with the right experience can give them the added confidence to push forward with their plans.
An experienced external investor can play a key role in this process with its capital and expertise. Take our recent partnership with Connect Health. The management team at the Newcastle-based business came to LDC with a clear growth plan and confidence that our support could help turbocharge their ambitions. Our partnership with the business has helped it to acquire a complementary business within 12 months and is enabling Connect Health to remain at the forefront of patient care and operational efficiency through investing in its infrastructure.
As the economic situation across the UK continues to improve, now is the time for businesses based in the North East to confidently push for growth, and continue to build scale and resilience.
With over 40 years’ experience of partnering with ambitious management teams to help realise their growth strategies, we are committed to supporting business leaders across the region are looking forward to helping businesses build back stronger.
