LDC reaps 2.5x on £95m sale of Capital Economics to Phoenix

The deal provided LDC with a 2.5x return, representing an IRR of 43%.

Phoenix is currently investing from its £415m vehicle Phoenix Equity Partners 2016, which targets companies with enterprise values of £30-150m. Unquote understands the transaction is the sixth investment made by the fund.

Since LDC's initial investment three and a half years ago, Capital Economics has opened new offices in New York and Sidney, and launched new services. The business increased its revenues by 30% to £22.5m, according to a statement, with headcount increasing by 30% to around 140.

Under Phoenix's tenure, the company will pursue potential bolt-on acquisitions and continue to invest in new services and technology.

As part of the deal, Capital Economics chairperson Roger Bootle will retain a significant stake in the business.

Previous funding
LDC acquired a minority stake in Capital Economics in October 2014 in a deal that valued the firm at £70m.

Company
Founded in 1999 and based in London, Capital Economics is a macroeconomic consultancy firm. It provides analysis, forecasts and consultancy related to macroeconomic activity, financial markets and individual sectors.

According to publicly available records, Capital Economics generated EBITDA of £6m from revenues of £20.6m in 2016.

People
Phoenix Equity Partners – Chris Neale (partner).
LDC – Troy Harris-Speid (investment director).
Capital Economics – Bob Dowson (CEO).

Advisers
Vendor – BDO (corporate finance).
Acquirer – Livingstone (corporate finance).
Company – Wyvern Partners (corporate finance).

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