LDC takes stake in Exchange

Lloyds Development Capital (LDC), the private equity arm of the Lloyds Banking Group, has acquired a controlling stake in 1st – The Exchange from Vertex for £42m.

1st – The Exchange provides software to 27,000 small and medium-sized financial intermediaries, such as independent financial advisers.

Vertex, which is owned by a consortium of US private equity firms, is a provider of outsourced business services and technology solutions for the UK market. It will retain a significant share in the business as part of the transaction.

The management team will be led by current managing director, David Child, along with existing directors, Paul Yates and Kevin Budge.

In personnel changes, Alastair Hazell has been appointed as chairman of the board along with non-executive directors, Ben Gunn and Ivan Martin. Hazell was group managing director for Thomson Reuters (EVCJ’s parent company). Gunn recently retired from running Friends Provident and Martin is Executive Chairman of Sesame Group, the UK’s largest IFA network.

Managing director at LDC, Peter Brooks said: “This investment fits squarely within our strategy to support high quality businesses in the TMT sector and in the business services sector area generally.”

Torch Partners has been advising LDC on the deal while Hawkpoint has been working with Vertex.

LDC has already done more than 10 deals this year and plans to invest up to £250m in 2009. It most recently backed a buy-out of Wealth at Work from JP Morgan Asset Management.