Today's environment is prompting many businesses to reassess their strategies and priorities – and it is the case as much for large corporates as it is for mid-market businesses and the units within them. Freeing and nurturing underloved assets can help them to truly thrive.
Carving out high-potential businesses from their parent companies can be a powerful way to energise both the businesses themselves and the teams driving them.
For public companies in particular, an ongoing challenge is balancing results that prioritise predictability rather than growth potential. This often stifles the ambition to significantly enhance value. In contrast, a corporate partnership can provide the motivation and perspective needed to think beyond the short term.
Inflexion helps businesses navigate complex transitions to become fully independent and sustainable, a process that typically takes around 12 months. Its network of experienced specialists and in-house expertise means it provides support across technology, IT, finance, and HR during this transition phase. Inflexion’s expertise across subsectors including investment platforms, TICC, and fund services means it understands the nuances of carve-outs and the practical challenges they bring.
The people side of things is very important in carve-outs, particularly in business services businesses. “Skillsets and relationships count for a lot in business services, where professionals are often the key to client relationships. For this reason, ensuring talent feels motivated and energised is crucial,” points out Isabelle Pagnotta, Partner and Head of Business Services at Inflexion.
By working closely with stakeholders and maintaining a steady focus on delivering what’s promised, Inflexion helps businesses move from transition to growth. Importantly, this doesn’t have to mean relinquishing control; Inflexion is supporting a growing number of minority strategic partnerships to drive value.
aosphere: In 2023 magic circle law firm Allen & Overy (A&O) partnered with Inflexion’s Partnership Capital fund and US-based investor Endicott Capital to carve-out its data business, aosphere. Since then, revenues have grown at double digits, a new vertical in crypto was launched, and a strategic acquisition was completed.
Axiom GRC: In December 2024, Inflexion completed the £430 million carve-out of Marlowe plc's Governance, Risk, and Compliance (GRC) division, since then the business has completed three acquisitions, launched a new cyber division and recently rebranded to Axiom GRC.
Kynetec: The specialist information and data provider undertook five acquisitions and grew EBITDA 200%.
BES Group: The TICC specialist has grown revenue four-fold since its 2015 carve-out by Inflexion, with 16 acquisitions complementing impressive organic growth.
Inflexion has a proven track record in effecting carve-outs and supporting their growth as an independent entity.
aosphere
In 2023 Inflexion’s Partnership Capital led as a strategic partnership with Allen & Overy (A&O), a magic circle law firm, and Endicott, a US financial sponsor to grow aosphere, legal and compliance data subscription platform. The transaction enabled A&O to retain a significant stake in aosphere, the business it created in 2002, with Inflexion chosen for its proven success in supporting corporate carve-outs and data businesses. Its track record of extricating systems and building standalone new ones means aosphere’s leadership team can continue to focus on its day-to-day business and look ahead to future growth as an independent entity providing clients with the most comprehensive, reliable, and user-friendly legal and regulatory information and services.
Its growth since then has been impressive, with revenues growing at double-digits despite the transition, an acquisition completed and a new vertical launched for crypto. The acquisition of Switzerland-based BRP Bizzozero enabled aosphere to enter the private banking and wealth management space. Says CEO Marc-Henri Chamay: “We’d never have managed this sort of purchase before independence. It had been on our radar for years, operating in parallel to us, then it came to market shortly after our transaction, so it took priority over other goals. Inflexion were very supportive when the opportunity came up.”
aosphere serves over 1,300 clients including banks, asset managers and corporates, providing online legal analysis on a subscription basis across a range of key compliance topics in complex areas such as financial derivatives, shareholder disclosure requirements, cross-border marketing, and data privacy.
Generative AI is a major area of investment for aosphere now, with its new AI tool allowing users to ask a natural-language question and receive an instant, clear answer, backed by data and references. A focus on accuracy meant selecting the right AI tools was not trivial. Inflexion helped by introducing specialists, including a highly experienced consultant who had worked successfully with another Inflexion portfolio company.
Following the launch of crypto shortly after the transaction, the business is about to enter another vertical with the launch of a cross-border lending product for the private credit market. More acquisitions may complement the organic efforts, and double-digit revenue growth is driven by a c. 50% increase in clients.
Axiom GRC
In December 2024, Inflexion completed the £430 million carve-out of Marlowe plc's Governance, Risk, and Compliance (GRC) division, establishing the business as an independent entity well-positioned for significant growth. GRC had been formed in 2019 to deliver mission-critical compliance services and software to help clients adhere to legal and regulatory standards.
Despite contributing to Marlowe's impressive group revenues of £500 million and EBITDA of £90 million, CEO and Founder Alex Dacre recognised that GRC’s potential was constrained within a publicly listed structure.
"From our first discussions in late 2023, Inflexion demonstrated a deep understanding of our business and moved quickly to support the transaction," Alex recalls. GRC’s existing structure as a standalone division within Marlowe made the transition relatively smooth.
The transaction drew on Inflexion’s extensive experience with compliance-focused businesses and complex carve-outs – GRC was its third in just 12 months. Familiarity with the compliance sector gleaned from investments in businesses such as Alcumus, BES, Phenna and Celnor as well as an established relationship with Alex enabled Inflexion to move quickly when Marlowe began reassessing its strategic priorities.
Independence has given GRC wind in its sails, with three acquisitions completed since the carve-out. The first two acquisitions (in the UK and US) took place shortly after and created a new business line in cyber, while the third acquisition is a business in the UK which enhances GRC’s position in its employment law compliance vertical. This growth means that today, GRC’s business lines address enterprise risk, health and safety, HR compliance, compliance eLearning, ISO certification and now cyber compliance.
GRC is targeting significant growth within its core markets with Inflexion’s support. With an addressable market estimated at £5 billion in the UK and £40 billion globally, the business is well-positioned for expansion. “We've got a very clear strategy: we want to build this business into the leader in compliance services and software for SMEs alongside delivering brilliant enterprise solutions for larger corporate customers. We have the right market backdrop and the right investor behind us,” Alex enthuses. Inflexion’s Commercial team have supported GRC to set out this ambition.
More recently the business has been rebranded as Axiom GRC, marking its ambition to create a new category of GRC platform built on powerful SaaS and expert compliance advisory across a market-leading breadth of risk and compliance areas.
Kynetec
The specialist information and data provider to the agriculture and animal health markets was carved out of its listed parent by Inflexion in 2016. Management worked closely with Inflexion on new product development, geographic expansion, new data delivery methods, and five acquisitions, including that of Germany’s Kleffmann at the end of 2019. A careful combination of organic and acquisitive growth in the five-year partnership following the carve-out propelled Kynetec to triple its revenues and nearly triple headcount during the partnership as it became a global leader in agricultural and animal health market research, data and insights. The firm had strengthened its operations in North and South America, Asia and Europe, resulting in a global business operating in 30 countries before it was sold in 2021 to a US investor.
BES Group
Inflexion led the carve-out of the engineering testing, inspection and consultancy (TICC) services specialist BES Group (formerly British Engineering Services) from RSA plc in 2015 to support BES’s development into a unique asset of scale in its market. Inflexion went on to support significant investment into various areas of the TICC business, including building a fully integrated back office, strengthening the team, and developing its technology. Management also worked with Inflexion’s digital team to create a best-in-class tech-enabled service, while a number of acquisitions expanded BES’s offering.
Convinced the business had further to go with Inflexion’s backing, Inflexion re-invested in the company in 2021 to support its continued growth. Overall, 19 acquisitions have helped revenues swell from c. £40 million in 2015 to over £170 million for 2024.
