Private equity providers are proving there is life in the Midland management buy-out market with one of the biggest deals of the year so far.

The £136 million recapitalisation of Associated Dental Practices (ADP) by Lloyds TSB Development Capital (LDC) and other capital providers in a secondary MBO, brought the total number handled by LDC’s Birmingham-based Midland team this year to six. Birmingham has invested more than £53 million of equity in 2009, more a third of LDC’s national total of £184 million.

For the Associated Dental deal, LDC in Birmingham invested alongside Palamon Capital Partners, AlpInvest Partners, and Morgan Stanley Alternative Investment Partners.

The £136 million infusion will enable the Surrey-based company to expand its national network of practices, which include three in Warwickshire and two in Staffordshire, through further consolidation of the dentistry market.

Established in 1985, ADP is the second largest provider of National Health Service dentistry in the UK. With 123 practices located across the UK, the company now serves about 1.5 million patients.

The ADP management buy-out team is being led by chief executive Bharat Patel who will continue to manage the business.

Since joining ADP in 2003, Mr Patel has overseen the growth of the business from just 15 practices located within the South of England to a current total of 123.

The latest deal was led by Martin Draper, managing director of LDC’s Midland operations, along with Chris Hurley, Andy Grove and Alistair Pendleton. Mr Hurley will join the ADP board.

Maurice Dwyer at Wragge & Co in Birmingham acted as legal adviser to LDC.

Mr Draper said that as well as completing new equity investment transactions his team was also continuing to support existing companies in its porfolio.

Most recently, it has supported portfolio business Emprise, a provider of services to blue chip companies and public bodies across the UK, in its buy and build strategy.

Emprise has recently completed the acquisition of Active Cleaning, a company which specialises in office and commercial cleaning.

LDC has backed a number of successful MBOs this year, including Nuclear Engineering Services, Orion Media and the Homeserve Emergency Services division (since rebranded Evander).

Mr Draper said: “2009 has been an extremely busy year for LDC here in the Midlands and the successful completion of another two deals recently reflects the consistent dedication and hard work of the Midlands team.

“With an experienced management team and strong reputation, ADP will be an excellent addition to our investment portfolio as the company continues to consolidate the highly fragmented UK dental market.

“What’s more, our commitment to supporting the growth and expansion of our existing portfolio companies’ remains of equal importance and the recent acquisition of Active Cleaning by Emprise will further consolidate this businesses existing service offering within the specialist cleaning arena.”