LDC generates 3.5x on PEI sale to BDC

Kenny Wastell
11 June 2018

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LDC has generated a 3.5x return on the sale of alternative assets media company PEI Media Group to Bridgepoint Development Capital (BDC).

The transaction brings to an end a holding period of less than three years for the vendor, representing an IRR of 70%.

Unquote understands PEI generated underlying EBITDA of around £8.5m in its last financial year, and the figure is projected to increase to around £10m in the current financial year. The business was expected to be valued at more than 10x EBITDA, according to a recent report by Unquote sister publication Mergermarket, while Betaville reported that the transaction is worth more than £120m.

The publication also reported that US-based GP Flexpoint Ford and Bowmark Capital were involved in the final round of bidding. Unquote parent company Acuris was involved in earlier stages of the auction.

BDC is currently investing from its third fund, which seeks to invest £20m-75m in companies with enterprise values between £30m-125m.

The company will pursue an acquisitive and international growth strategy, in addition to investing in its existing products, under BDC's ownership.

During LDC's tenure, PEI has invested in its digital platforms, revised its subscription model, increased its headcount by 30% and expanded its focus on events. The business has doubled revenues from events during the course of the holding period and increased its overall revenues by 78%, according to a statement issued by the vendor.

LDC also previously owned Real Deals – a competitor to PEI's Private Equity International publication – having bought the title's publisher Caspian Media in January 2002. It sold Caspian to Ridgeway Capital for an undisclosed sum in April 2017.

Previous funding
LDC backed the management buyout of PEI in September 2015 in a deal estimated by Unquote Data to have been worth between £25-50m.

Company
London-headquartered PEI is an alternative assets media, data and events business that operates brands including Private Equity International, Infrastructure Investor and Real Estate Capital. According to the vendor's statement, PEI generated a turnover of £32m in 2017.

PEI has additional offices in Hong Kong and New York, and has a total headcount of 180. It is understood that around half of the company's turnover is generated from events. Unquote also understands that 45% of its revenues are accounted for by sales in the Americas, with 37% accounted for by European sales.

People
LDC – Troy Harris-Speid (investment director); Alex Wilby (investment manager).
Bridgepoint Development Capital – Robin Lawson (partner).
PEI Media Group – Tim McLoughlin (CEO).

Advisers
Vendor – Livingstone Partners (corporate finance); Squire Patton Boggs (legal); EY (financial due diligence); PwC (financial diligence); Intechnica (IT due diligence).
Equity – Raymond James (corporate finance); Deloitte (financial due diligence, tax); Travers Smith (legal); AMR (commercial due diligence).
Management – Liberty Corporate Finance (corporate finance).