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Inflexion Private Equity has announced that Inflexion plc, its listed investment vehicle intends to acquire a portfolio from London Merchant Securities (LMS), the property and venture capital group.
The transaction will result in a significant increase in the company’s net asset value from approximately £13.4m to approximately £45.8m. In addition to the acquisition, LMS has injected £21m capital with other existing shareholders also being invited to participate in a larger capital increase. LMS will invest a substantial part of its UK-quoted portfolio, worth £12m, into Inflexion in exchange for newly issued shares. The £21m funding comprises an open offer of up to £10m, of which LMS has subscribed to £6m, with other investors also participating and a deferred cash raising to which LMS has committed to subscribe a further £15m.
In total, as the cornerstone investor, LMS has contributed £33m to funds under management. Inflexion will use its expanded capital base to increase it’s commitment to Inflexion Private Equity Fund 2, to at least £20m from £7.5m. Following the deal, Inflexion will not be looking at larger transactions, but will have the flexibility to do top-ended deals without syndication.