LDC invests to support the GBP 17.8 million management buyout of GMG Property Services Group, the UK’s leading provider of software services to estate agents

Leading mid-market private equity provider LDC has today announced that it has completed an investment to support the £17.8 million management buyout of GMG Property Services, the UK’s leading provider of software services to estate agents.  Moving forward, the business will be rebranded ‘The Property Software Group’.

LDC will take a significant stake in the business, investing alongside the incumbent management team led by Chief Executive Mark Goddard.

Established in 2007, GMG Property Services is the UK’s largest supplier of software, technology and design solutions to the property industry. Its circa 6,700 strong branches comprises some of the UK’s leading residential sales agents, residential letting agents and managers of letting properties.

Property Software Group owns and licences four key software brands: CFP Software, which specialises in supplying lettings, property management, accounting and estate agency software; Vebra Solutions, the UK’s number one provider of software solutions for property professionals; Core Systems, the leading provider of innovative software for residential estate agents; and Alto the newly launched, market leading SaaS estate agency software offering.

The business employs over 170 people across its network of UK operations in York, Redruth, Luton and Wolverhampton. It has an annual turnover of more than £10million.

The deal provides the opportunity to accelerate the recent organic revenue growth of the business, primarily through the ongoing roll-out of Alto Residential software package, which is already acknowledged as the leading cloud-based IT services product for estate agents.

LDC’s investment will also help to support the management team’s buy and build strategy, targeting complementary businesses to increase market penetration and expand Property Software Group’s existing customer base in what is a fragmented market. The deal also enables the Guardian Media Group to fully exit the business.

As part of LDC’s investment strategy, the existing management team will be further supported by the appointment of Alastair Hazell as Non-Executive Chairman. Mr Hazell has worked with numerous private equity backed companies and his significant experience in data and software businesses will help to drive the growth strategy.

The deal was transacted by LDC’s Reading team, led by Managing Director Yann Souillard and Director Alastair Weinel, who will both join the board with immediate effect.

Mark Goddard, Chief Executive of GMG Property Services said:

“LDC’s investment reflects their confidence in our future potential. We anticipate that LDC’s support will allow us to further strengthen our market leading position, invest for future growth both organically and through acquisitions, as well as continuing the provision of high quality service for all our customers, existing and new.”

Yann Souillard, Managing Director, LDC Reading said:

“In Property Software Group, we are partnering with a high-quality management team and a market-leading business which has a strong platform from which to generate further growth through Alto. The business provides a premium service to its customer base of residential agents and property managers, and is supported by a well invested infrastructure. Going forward, we will work closely with the team to identify acquisition opportunities to accelerate growth and lead consolidation of the market.”

Andrew Miller, CEO, Guardian Media Group, said:

“Since forming the Property Services Group in 2007, GMG has successfully incorporated a series of assets from across the property industry and grown them into one market-leading group. It is now right that LDC, Mark Goddard and the current Property Services Group management team take this consolidated entity into the future and that GMG continues to focus on investing in the core part of our business, Guardian News and Media”.

LDC completed the transaction with support from a number of regionally based advisors, including Shoosmiths, HMT and SBCF.  London-based Dean Street also advised LDC on the transaction with Silicon Valley Bank providing acquisition debt facilities. Capstan Capital Partners advised Guardian Media Group on the transaction, with Boyes Turner providing legal advice.

The deal with the Property Software Group forms part of LDC’s continuing strategy to invest in leading regional mid-market businesses whilst backing high calibre management teams. The transaction represents the sixth investment of 2013 for LDC’s Reading team including two portfolio acquisitions, and brings the total equity invested by the office this year to a record of more than £95million. On a national level, the deal is LDC’s 22^nd new investment of 2013, having invested over £350million of new funding, together with a further £50million of capital to support portfolio business acquisitions. Last year, LDC invested over £300million across 18 investments.

Press information: Katie Dale, Citypress (on behalf on LDC). Telephone: 0121 314 4192.

Notes to Editors:

– LDC is part of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority.
– LDC backs ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
– LDC has, since 1981, completed over 400 investments.
– LDC has a portfolio of over 80 businesses across the UK which collectively generates £4bn of revenues and £460m of profit, and employs over 30,000 people.
– LDC invests in a broad range of sectors and has particular experience in Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services.
– LDC has invested £1.5bn into ambitious businesses in the past five years to support their growth. It plans to invest £2bn over the next five years.
– LDC invested over £280m of equity across 18 new businesses in 2012. It also continued to support the ‘buy and build’ strategies of our portfolio firms with £86m of additional equity funding for acquisitions during the same period, alongside £23m drawdown into fund investments.
– LDC is the leading private equity company in the UK mid-market. Recent transactions include investments with Joules, The Training Room, Equiom, uSwitch.com, Angus Fire, Rimor, Node4 and D&D London.
– LDC has a UK regional network alongside an international operation based in Hong Kong.
– For further information, call Yann Souillard on 0118 958 0274 or visit www.ldc.co.uk