Fish Insurance

The company

Fish Insurance is a well established, niche insurance broking business which targets the disabled and elderly sector, providing specialist schemes including employer’s liability, mobility equipment and motor insurance. The company is the only UK insurance broker to focus exclusively on this market across a range of schemes and enjoys clear market leadership in its core liability segment.

The investment

Inflexion is backing the incumbent management team and will work with them to accelerate growth in the business through:

• capitalising on current market growth;
• developing new products streams within the disabled sector; and
• investigating potential bolt-on acquisitions.

Inflexion has introduced Tim Ablett, a highly experienced Executive Chairman from the insurance sector, who led his own buyout of First Assist in 2003 and is currently Chairman of Age Concern and non-executive Director of Hastings Insurance. The deal was led by Catherine Richards and Nicola Boyd together with Tim Smallbone. Catherine and Tim will join the board as non executive Directors.

FDM Group

The company

FDM Group is an international IT services company specialising in six core service areas: project management office, development, application support, testing, infrastructure and training. Founded in 1990, with its HQ in Brighton and a further six offices in London, Manchester, Frankfurt, Luxembourg, Zurich and New York, FDM made £5.5m EBITDA on revenues of £52.9m in 2009. The company works with approximately 200 blue-chip clients including the BBC, Barclays, HSBC, The AA, BSkyB, Detica and British Airways.

FDM operates a unique business model whereby IT-literate graduates are provided with intensive training in a number of disciplines including; Java, .Net, Testing, Application Support, Infrastructure and PMO through the FDM Academy Programme. Only the most talented graduates, make it through the stringent selection process, benefiting from first-class training, which culminates in a two-year employment contract with FDM. Once qualified, these IT Consultants are in high demand from large organisations looking for entry level IT staff. FDM provides these IT Consultants to clients on flexible 1-2 year contracts creating strong revenue visibility for the business. Frequently, FDM IT Consultants are supplied alongside more senior freelance IT contractors from FDM, creating an integrated package of skills.

FDM’s robust business model has enabled the company to grow steadily throughout the downturn that has severely impacted many other IT services providers. In early 2010, demand picked up significantly with FDM having over 850 billable individuals at work (400+ IT Consultants and 450+ freelancers), up from circa 600 at this time last year. Inflexion and FDM’s strategy is to continue this growth by expanding the range of industry sectors and geographies targeted, whilst also adding more IT specialisms to its skills offering.

The investment

The £35.4m public-to-private was led by John Hartz, Richard Swann and Gareth Healy. Both John and Richard join the Board of the acquiring entity, Astra 5.0 Limited, as non executive Directors.

This acquisition builds on Inflexion’s strategy of acquiring high margin businesses that are resilient throughout the cycle. Additionally, it operates in the IT Services sector, where we have particular experience.

“Inflexion has strong expertise in the IT sector and has shown its ability to expand international businesses. We have enjoyed working with the team during the deal process and look forward to their involvement in the next stage of FDM’s growth and development. FDM is now well structured to enable us to pursue the significant market opportunities available.” Rod Flavell, CEO, FDM.

Griffin Global Group

The company

Griffin is the global market leader in the provision of specialist travel services to the marine, offshore and cruise industries, arranging travel for crews rotating onto merchant ships, to oil and gas hubs and to cruise ships. The business was founded in 1977 and has since expanded to deliver over £300m p.a. of travel services from 31 strategically located offices.

Griffin’s customers rely on it to get their crews to their destinations, on time, worldwide. These crew members are often involved in high-value applications, where being a day late would disrupt voyage schedules or obligatory crew rotations with major cost implications. Griffin’s global resources and experience at manoeuvring large multi-national crews at short notice, with complex routing and visa requirements, have resulted in long term customer relationships and strong market share growth.

Griffin provides a completely outsourced service, enabling clients to eliminate the fixed cost of an in-house travel desk, whilst delivering a much more sophisticated offering. Its position as the largest global provider enables it to offer the best possible fares to its customers and often find availability that others cannot, particularly to some of the more far-flung locations that are important to its oil and gas and marine customers.

The investment

John Hartz, Christian Hamilton, Gareth Healy and Andrew Leek led the transaction on behalf of Inflexion. Christian Hamilton and Gareth Healy will join Griffin’s Board of Directors. As part of the transaction, Dick Porter, former CEO of STA Travel will join Griffin as non-executive Chairman.

The investment is partly structured to allow the buyout of the estate of a deceased founder investor and partly to realign the equity interests of the ongoing management team.

Inflexion-managed funds have invested £11million, taking a highly structured 25% equity holding. Management have also invested substantially and a package of £22m debt facilities were provided by HSBC.

The Inflexion difference

Inflexion’s strong track record of helping create robust, professional management structures for fast growing businesses, international experience and its deep expertise in all the business sectors relevant to Griffin, made it an attractive partner for the management team as they seek to move onto the next stage of growth. Inflexion has also provided expertise in debt structuring and foreign exchange optimisation to construct a highly advantageous balance sheet structure to boost returns whilst minimising risk.

NAH

The business

National Accident Helpline (“NAH”), is the UK’s leading legal services marketing company specialising in personal injury cases. Founded in 1993 and based in Kettering, NAH has grown to be the largest referral source for personal injury claims in the UK, gaining cases through major response-driven advertising campaigns primarily on television and a growing internet presence. Calls generated are screened by its team of law graduates, who then refer the appropriate customer enquiries to its 90-strong panel of approved solicitor firms. NAH is the clear market leader in its field with a highly recognisable, respected brand and an excellent reputation with the legal profession.

The investment

Simon Turner, Richard Swann, Christian Hamilton, Andrew Leek and Malcolm Coffin led the transaction on behalf of Inflexion and Richard Swann will be joining the board.

SMD

The business

SMD is the world’s leading privately-owned designer and manufacturer of subsea vehicle systems and the world’s second largest supplier of Work Class Remotely Operated Vehicles (WROVs) – unmanned submarines that are able to lay subsea cables and pipelines in depths and conditions that would be otherwise inaccessible for human divers.

Established in 1971 by the Reece family, the company dominates the market for supplying subsea vehicles to bury fibre optic cables for the telecoms industry. 90% of the world’s fibre optic network has been laid by vehicles manufactured by SMD. Today the company employs 135 people and supplies primarily the oil and gas sector. It also provides bespoke equipment for the telecoms, renewable energy, mining and defence industries. It has carried out long-term developmental research into the installation of offshore tidal-based renewable energy projects.

SMD has an excellent market position in a growing market – with annual spend expected to increase by more than a third over the next three years. As a result, the business has a very strong order book. In addition, the investment by Inflexion allows the business to fund further international development and accelerate growth.

The investment

SMD is our third oil and gas-focused investment in recent years and the sector together with the wider energy industry, continue to be areas of focus for us.

The £70 million buyout was led by John Hartz, Tim Smallbone, Catherine Richards and Malcolm Coffin on behalf of Inflexion. Both Tim and Catherine have joined the Board of Directors. Funds managed by Inflexion invested £25 million for a majority equity share. Both management and the vendor invested and a package of debt facilities was provided by HSBC and Barclays.

Pims Group

The business

Pims Group is a leading provider of waste water support services. Established in 1972, Pims Group comprises Pims Pumps, which designs and installs the pumps, and Pims Services which manages their maintenance and ongoing service contracts. The business, run from two sites in Farnborough and Stoke-on-Trent, provides domestic and commercial sewerage and rainwater pump systems and services throughout the UK. The company’s services also encompass sewage treatment systems, drainage maintenance, rainwater harvesting and environmental testing.

Employing 114 people, Pims offers a national one-stop-shop to its 4,000 clients, including Tesco, Persimmon, Sainsbury’s and McAlpine. In 2007 the company sold and installed over 700 pumping stations and provided service and maintenance for more than 5,000 residential, commercial and industrial sites. The Group has historically grown at around 13% year-on-year and is forecast to maintain this momentum, having established a deserved reputation for design quality and service expertise.

The company operates in a fragmented marketplace estimated to be worth £1 billion in 2007, with few competitors of similar scale and coverage.

The investment

We had begun investigating the company and its marketplace in early 2007 and held preliminary talks with management in July of that year. This significantly strengthened our position once a formalised sale process was initiated five months later.

The transaction was led by Simon Turner, Charles Thompson, Andrew Mainwaring and Nicola Boyd from Inflexion. We have taken a majority shareholding. John Hartz and Charles have joined the Board of Directors. Management has also invested with debt facilities provided by HSBC.

Jack Wills

The business

Jack Wills is a premium fashion retailer of preppy, classic casualwear appealing to the 16 to 24 year old age demographic. Established in 1999 in Salcombe, by the time Inflexion invested in the business Jack Wills had opened 21 stores in the UK as well as a hugely successful catalogue, “The Hand Book” and online retail model, “Jack’s Place”.

Management has been very successful in growing revenues and profits extremely rapidly and at market leading growth rates, whilst maintaining high margins. Future plans include the further roll out of stores in the UK as well as establishing a presence in key international markets. Jack Wills represented an opportunity to invest into a fast-growing, well-established and well-run niche retailer. Following our investment, we have introduced management to a number of successful retail entrepreneurs who can contribute significantly to its supply chain as well as Jack Wills’ development as a leading brand.

The investment

Once exclusivity had been granted, we took just two weeks to complete the transaction, acquiring a significant minority stake in the business. Simon Turner and Amanda Luckett led the process on behalf of Inflexion and Simon and Alistair Hamilton have joined the Board of Directors.

Aspen Pumps

The business

Aspen Pumps designs and distributes condensate pumps which remove water and condensation from air conditioning systems. Established in 1992, Aspen launched the first peristaltic condensate pumps in the marketplace and has gone on to develop an excellent brand reputation for new product development and innovative design coupled with reliability.

Based in Hailsham, East Sussex and employing 56 staff at acquisition, Aspen is the clear market leader in the UK and is one of the top two in Europe with a network of wholesalers and distributors in over 50 countries.

The air conditioning market has experienced buoyant growth for the past five years and is forecast to maintain this trend in part driven by two factors: the effects of climate change and rising GDP per capita. Market growth is predicted to continue at 12% p.a. in the short term.

The senior management team has been strengthened by the addition of Adrian Thompson and Ian Stuart who together have a combined 50 years experience within the building materials industry. Thompson was previously MD of Greenwood Air Management and Stuart, who joins as Chairman, is currently Chairman of Aqualisa and Just Trays with previous roles including CEO of Heywood Williams PLC and Caradon Plumbing.

The investment

The £25 million buyout was led by Simon Turner, Charles Thompson and Christian Hamilton. Charles and Christian have joined the Board of Directors. Funds managed by Inflexion invested £4.7 million.

Management also invested and £17 million of debt facilities were provided by Lloyds TSB.

Parasol

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.

Red Commerce

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 have both taken seats on the Board. Funds managed by Inflexion invested £7 million. Management re-invested substantial funds together with the vendors, with debt facilities provided by HSBC.

Harrington Brooks

Harrington Brooks (formerly All Clear Finance) is one of the UK’s largest providers of debt management and consolidation services.

The Manchester based company was founded in 1998 since when it has enjoyed tremendous organic growth, culminating in a listing in the 2004 Sunday Times Fast Track 50. Today Harrington Brooks helps over 10,000 clients with a variety of debt management services, including debt consolidation, re-mortgage and IVA services.

With UK household indebtedness at unprecedented levels, the sector dynamics are highly favourable for Harrington Brooks.

The investment

The £15 million MBO, the first transaction out of Inflexion’s Manchester office, was led by Tim Smallbone and Andrew Mainwaring. Tim joined the Board of Directors. Funds managed by Inflexion invested £6.3 million at acquisition. The vendors re-invested substantial proceeds alongside the management team and Inflexion. Debt facilities were provided by Royal Bank of Scotland.

ICS

The business

Independent Clinical Services (ICS) based in Bristol, is the leading provider of temporary healthcare staff, specialising in placing scarce senior and high grade nurses into the UK healthcare sector. In addition to supplying nurses into hospitals, ICS’s rapidly expanding complex community care business provides nursing services to patients in their homes.

ICS has carved out a niche position in the high-end of the market as a result of its ability to fulfil customer requests with far greater success rates than any of its competitors. ICS placement rates are typically c.90%, compared to the market average of c.30%. It ensures the excellent placement rates through an advanced centralised call centre and a database of highly skilled, mobile nurses.

Our investment case had two principal growth areas, geographical expansion and complex community care. During our ownership, the business continued its rapid spread of geographical coverage, adding significant numbers of new customers and delivering its market-leading service on a national level. Complex community care produced c.40% per annum growth rates and benefits from high revenue visibility. These factors, together with continued investment in IT infrastructure and optimisation of working practices, resulted in a successful exit to Blackstone who identified the business as the best positioned and best performing asset in the sector.

The exit

The business was sold to Blackstone Group in June 2010. In just 22 months from investment, Inflexion achieved a 2.7x money multiple and 82% IRR, with the potential to earn more through deferred consideration. The deal was led by Gareth Healy, John Hartz and Nicola Boyd.

HKI

The business

Established in 1989, Healthcare Knowledge International (HKI) provides benchmarking and other performance analytical information to European public health services in order to maximize efficiency and reduce overall costs. The company effectively created the market. HKI had signed forward contracts for the next five years, thereby effectively locking out any potential competition. HKI acquired a similar business in Spain in 1996. HKI is the most significant database for patient-based information in the Iberian region.

During our ownership we have worked with management to: source new markets and clients; optimise tax structuring; and introduce formal KPI monitoring. A follow-on acquisition of a health audit business (HQS) was made in January 2005, and a pharma data business, CRC, was added in 2006.

The investment

The £11 million MBO was led by John Hartz and Charles Thompson. John and Charles have joined the Board of Directors. Funds managed by Inflexion invested £4 million.

The management team invested in the transaction and debt facilities were provided by HSBC.

The exit in July 2009 generated a return of 2.6x.

Viking Moorings

The business

Viking is a market leader in the provision of ‘mission critical’ mooring solutions to the oil and gas sector for key assets such as semi-submersible drilling rigs, drillships and floating accommodation platforms. The services which Viking provides include initial design and engineering assessments, computer modelling and simulation, procurement of equipment, mobilisation, equipment rental and demobilisation through to spooling and equipment testing.

Viking had several features that initially drew our attention and convinced us that it would make an exciting investment. These included being the clear market leader; excellent growth opportunities, such as the use of alternative mooring technologies like fibre rope; further potential expansion into the Mediterranean and Far East; as well as the potential for in-fill acquisitions and capex-led growth.

At the time of investment, market trends were also highly favourable and forecast to continue for the foreseeable future as a result of the growing demand for worldwide crude oil and natural gas, higher oil prices, significant forecast increases in deepwater drilling and increasing seabed congestion.

The incumbent senior management team possessed deep industry experience, with the majority having over 10 years service within Viking. To complement them we sourced an Executive Chairman to guide the company onto the next level.

Under Inflexion’s ownership, the business has invested significant sums into capital expenditure and opened overseas offices. EBITDA has grown from £5.2 million to a forecast £28.5 million in 2008.

The investment

The £22 million buyout was led by John Hartz, Tim Smallbone and Catherine Richards. Tim and Catherine have joined the Board of Directors. Funds managed by Inflexion invested £9 million. Bank facilities were provided by RBS.

Ilchester Cheese

The business

Ilchester Cheese Company Ltd (Ilchester) is the leading producer of blended cheese in the UK.

Founded in 1962, Ilchester was the first British cheese company to blend cheeses with other ingredients. Having created the market, Ilchester has continued to innovate and today sells some 50 products within the UK and exports to over 20 countries around the world.

Ilchester produces three of the top five brands, being Applewood, Mexicana and Five Counties, and enjoys a commanding market share. Consumers are increasingly moving to blended cheeses and the market has grown substantially since acquisition.

The investment

The £10 million buyout was led by John Hartz and Christian Hamilton, both of whom joined the Board of Directors. Funds managed by Inflexion invested approximately £2 million through a highly structured transaction, for a substantial majority stake.

The deal opportunity was sourced by Inflexion, who had worked with management to effect the buyout since 2001.

In November 2008, our entire stake in Ilchester was sold to Tine, a Danish milk cooperative. The exit generated a return of 2.0x our original investment and an IRR of over 20%.

Tekton

The business

Tekton was acquired in December 2006 for £12 million which included the simultaneous complementary acquisition of SiteStream Software Ltd, a software supplier to house building companies based in Surrey and Missouri.

Based in Manchester, Tekton Group is an Enterprise Resourcing Planning (ERP) software provider to the UK construction industry. Its products are used by customers such as Carillion, Skanska and Eric Wright Group as integrated accounting, resource application and planning tools that are particular to this industry.

Under our ownership, the company led by CEO, Richard Beaton, invested heavily in its infrastructure, consolidated its operations and expanded its sales force. The business saw its profits increase by 20% whilst employee numbers grew by over 16% to 95. In addition, in December 2007 the company acquired Wilcomp, a business and accounting software integrator based in New York, which achieved the objective of expanding the company’s footprint within the US.

Tekton was Inflexion’s fifth IT/technology-focused investment in recent years.

The investment

Inflexion sold its entire stake in Tekton in a trade sale to Sage (UK) Ltd for £21 million. In 15 months Inflexion has made an IRR of 65% comprising a 2x return on its original investment of £4.6 million.

Both the initial acquisition and the subsequent sale were led by Tim Smallbone and Catherine Richards.

ACIS

The business

ACIS (Advanced Communications and Information Systems), was the UK’s leading provider of real time passenger information systems. Inflexion acquired it in April 2005 in a deal valued at £25 million. In the subsequent 19 months, as well as continuing to roll out its UK customer base, ACIS had proved a new revenue stream of international sales and saw its profits double. Tandata, a complementary information systems business was also acquired in October 2005 opening up the airport information market. ACIS was listed in the Sunday Times’ Tech Track 100 listing for three consecutive years.

The investment

The accelerated success of the company enabled us to consider various exit options earlier than originally anticipated. We opted for a competitive dual track disposal, led by Investec Corporate Finance.

Our entire stake in ACIS was sold in a secondary buyout to The Carlyle Group for £58.5 million. In 19 months we made a return of 3.3x our original investment and an IRR of over 100%.

The original buyout, subsequent acquisition of Tandata and ultimate exit were led by Simon Turner and Christian Hamilton.

Ster Century

The business

Ster Century was an 87 screen multiplex cinema chain operated from seven sites in the UK and Ireland. At the time, the cinemas were all new and the previous owners, a joint venture of two South African companies, had spent over £30 million on the chain.

The full maturation of all the seven sites drove profits against a backdrop of the steady market growth forecast. Management’s in-depth experience was focused on getting the best performance from the seven sites.

During our period of ownership profits were increased by more than 35% as management renegotiated film rentals, held rent reviews and introduced a bonus scheme for cinema managers with the aim of reducing headcount. As a result, cash generation remained strong and could be used to pay down bank debt swiftly.

The investment

In 2004 the exit environment was attractive with considerable synergies available to a trade purchaser. After negotiations with one trade purchaser, the management team offered to buyout the company themselves.

The exit transaction was completed in July 2004, generating net proceeds of £18.3 million, a multiple of 3.2x and an IRR of 225%.

Both the buyout and exit were led by Charles Thompson and John Hartz.