The business

Red Commerce Ltd (Red) is a pan-European IT resourcing specialist supplying SAP consultants to multi-national corporations on mid-term consulting contracts and permanent placements. With over 80% of Fortune 500 companies having implemented SAP within their business infrastructure, Red operates in a high growth market and has seen a doubling in demand for its specialised consultants.

Since its formation in 2000, Red Commerce has displayed an impressive history of growth culminating in its inclusion in 2005 Sunday Times Fast Track 100 list of companies, at number 17.

Using highly skilled, native speaking staff, Red Commerce supplies permanent and contract resources in over 14 countries across Europe, and employed over 60 people at acquisition operating from three UK offices and a European office in Cologne.

The investment

The £15 million buyout was led by Simon Turner, Andrew Mainwaring and Christian Hamilton. Andrew and Simon joined the board of Directors. Funds managed by Inflexion invested £7 million. Management re-invested substantial funds together with the vendors, with debt facilities provided by HSBC.

Throughout Inflexion’s ownership the business accelerated its international expansion, opening offices in Munich, Zurich and Stockholm, invested heavily in its business development function and developed a unique “consultancy” service line, RedSolutions. Since Inflexion’s investment Red’s profits have grown by 113% (CAGR: 16.3%) and the business is now operating with a record number of contractors and employees (staff numbers have increased by 40% since acquisition).

The exit

The business was sold to Dunedin in July 2011 for a headline valuation of £44 million. The exit represents a 4.4x return on investment.