Leading private equity firm LDC has backed the creation of a new national lettings and estate agency group in a £100 million transaction to merge Lomond Capital and Linley & Simpson.
The new group has a combined portfolio of over 22,000 properties under management and major hubs in private rental hotspots including Aberdeen, Birmingham, Brighton, Edinburgh, Hull, Leeds Manchester, Sheffield and York.
The group brings together some of the UK’s strongest high street letting and estate agency brands including Linley & Simpson, Thornley Groves, Brand Vaughan, John Shepherd, Stonehouse and Braemore.
With access to further acquisition facilities provided by LGT Capital Partners, the business will now look to strengthen its nationwide network through complementary acquisitions and organic growth.
Increased regulation, the recent abolition of tenant fees, a fall in the sales market in recent years and an ageing ownership profile have all driven consolidation opportunities in the private rental sector.
Stuart Pender, Group CEO, said: “Market conditions in the private rental sector are well suited to continued growth through consolidation. We are consolidating fragmented regional markets, enhancing the proposition the sector offers to clients and maintaining a local, on-the-ground approach which brings significant benefits to landlords and tenants.
“We will blend the best of both companies through this merger, which together with the backing of LDC and LGT Capital Partners will allow us to realise our ambitious plans for the UK’s residential lettings sector.”
Lomond Capital and Linley & Simpson have driven success through different growth strategies. Lomond has invested in developing a regional platform by building a presence in some of the most attractive UK cities for private renters. Linley & Simpson is already backed by LDC and has grown significantly by adopting an ambitious acquisition strategy across the Yorkshire region. Since LDC’s investment in June 2018, the business has made 18 acquisitions and doubled its portfolio from 5,000 to 10,000 properties.
Co-founder and CEO of Linley & Simpson, Will Linley, will join the board as Group Managing Director with a focus on delivering the Group’s ambitious acquisitive growth strategy, Nick Simpson will become CEO of Yorkshire and Martin Elliott CFO. Linley & Simpson Non-Executive Chairman Peter Chappelow will become Non-Executive Chairman of the group.
Will Linley added: “LDC has been a great supporter of our strategy to grow through acquisition. This transaction is a continuation of our approach to building our business while retaining our successful local approach. We’re excited about the opportunities in each of the Lomond regions and I’m looking forward to working closely with Stuart, the Lomond team and LDC to help grow the new group.”
The transaction was led by LDC’s Gareth Marshall, Rob Powell, Mike Barker and Jonathan Bell.
Gareth Marshall, Head of the North East at LDC, said: “From our partnership with Will and Nick over the past two years, we know the potential for ambitious businesses in this sector to grow quickly. We’ve supported them to make 18 acquisitions and we’re looking forward to helping the new group to expand quickly with its best-in-class multi-regional model. The residential lettings market offers an attractive opportunity for geographical expansion and we’re confident that the combination of Linley & Simpson’s and Lomond Capital’s impressive management teams and approach will complement each other perfectly for further growth.“
LDC plays an active role in supporting the buy and build strategies of its portfolio companies, enabling them to drive growth and market share. Two-thirds of its portfolio is currently deploying a buy and build strategy and in 2020 alone LDC supported more than 30 bolt-ons across its portfolio.
LDC was advised by Clearwater and Womble Bond Dickinson.
Lomond Capital was advised by Dickson Minto, Deloitte and Dow Schofield Watts.
Linley & Simpson was advised by Freeths and TLP Capital.