Gresham Trust has sold LSC Group to DML, the owner of Devonport Royal Dockyard, for GBP13.5 million. This gives Gresham an IRR of 35 per cent on its 1998 investment. This investment, for GBP8 million, was a 50:50 debt to equity split and Bank of Scotland provided the debt.
At the time Gresham purchased LSC Group it also bought Brandt Computer Holdings and immediately merged the businesses. This transaction, which created a company with 140 employees and a turnover in excess of GBP10 million per annum, is described by Gresham’s James Barbour-Smith, who led the deal for Gresham, as a management buyout/ buy-in.
DML has two primary motivators for the acquisition. First, as part of DML, LSC Group will be able to go for large contracts, which are difficult to win as a standalone business. Secondly, LSC Group will be able to work on internal projects for DML.
LSC Group was the largest independent military logistics consultancy company in the UK and is based in Staffordshire. In May 1999 LSC Group announced a partnership with Lockheed Martin, one of the world’s largest defence companies, to share in developing new military logistics technology. The aim was to share technology to become joint world class suppliers in the specialised sector of military logistics support during a five-year expansion plan.