The business

Parasol is one of the country’s leading employment services companies. Established in 2000, it now works with over 8,000 “flexible employees” and enjoys longstanding relationships with the top recruitment agencies. As an employment umbrella company, Parasol provides tax and billing payroll to its flexible employees whose services are contracted to end clients, typically large blue chip organisations.

The Warrington-based company has invested heavily in its highly scalable IT infrastructure. This provides further operational efficiencies and enables its 80+ head office staff to process the high volumes of transactions undertaken at a lower cost than its competitors. It is this competitive edge together with its dynamic management, which has led to the company’s strong growth, reflected in its inclusion in the 2005 Sunday Times’ Fast Track 100 in sixth position as well as being nominated for the 2006 list. It was also recently ranked 96th in the Top Track 250 list.

In a market characterised by fragmented competition and multiple routes to market, Parasol is the largest pure PAYE umbrella company, and as such is well placed to benefit from the forecast growth and consolidation of the sector.

The investment

The £23 million MBO was led by John Hartz, Andrew Mainwaring, and Catherine Richards. John and Catherine have joined the Board of Directors.

Funds managed by Inflexion invested £9.4 million for a majority equity shareholding. Management also invested significantly, and a package of £12 million of debt facilities was provided by HSBC. Inflexion sourced the transaction off market and negotiated directly with Parasol’s shareholders to drive the transaction to a successful conclusion.