Accelerating growth through M&A
We have significant experience supporting our portfolio companies to grow through M&A in the UK and internationally.
Ocorian, for example, completed four add-on acquisitions within 18 months of our partnership, and Huws Gray doubled the size of its business overnight through the transformational acquisition of Ridgeons, just four months after we made a minority investment.
Here we share some highlights from a selection of our portfolio companies who are benefitting from our M&A expertise.
Ocorian is a fund, corporate and trust administration business which partnered with Inflexion in September 2016 to enable its carve-out from its law firm parent Bedell Cristin and subsequent rapid acquisitive growth.
The industry in which Ocorian operates was consolidating fast, so the firm could either strive to become a leader, or risk being acquired itself. Realising the former was a better fit for the firm’s clients, management identified the need to build a global business to help it achieve leader status.
The firm was considering all this shortly after Inflexion had successfully floated the administration business, Sanne Group, on the London Stock Exchange. This recent, relevant experience combined with Inflexion’s carve-out skills, as evidenced in their carve-out of British Engineering Services from RSA Group, meant the opportunity to partner was appealing. In September 2016, Inflexion offered a flexible deal structure and dealing effectively with a legacy shareholder base, while also incentivising management for the next phase of growth.
Within 18 months of the investment, Ocorian made four strategic acquisitions which substantially enhanced the business’s global footprint. These were Mauritius-based ABAX, giving it coverage of Africa, Asia and the Middle East; MAS International, which is headquartered in Luxembourg, Europe’s largest administration market, and also has operations in Mauritius and North America; Jersey-based Capco Trust, enhancing Ocorian’s international maritime expertise; and Intruad / Intruma, based in Amsterdam and Luxembourg respectively.
We have also significantly strengthened Ocorian’s management team, putting in place a highly experienced Chairman, a Chief Financial Officer and a Chief Commercial Officer who is driving organic growth in the core business and international cross-selling through these acquisitions.
Scott Dunn is a luxury tour operator which creates highly tailored travel experiences for its guests. In 2014, the business partnered with Inflexion to accelerate its international expansion.
Scott Dunn provides a broad range of luxury holidays, from skiing and Mediterranean resorts to tailor-made journeys and bespoke honeymoons. Founded in 1986, it was voted the number one specialist tour operator by the readers of Condé Nast Traveller in 2014, the year we invested, and continues to hold the award in 2018.
The firm wanted an overseas presence, both to offer round-the-clock personal service to guests as well as to enable Scott Dunn to be better acquainted with its destinations. Management’s first port of call was the US West Coast as it gave the business a larger time-zone coverage. The firm decided to expand through acquisition rather than greenfield as it was already familiar with Aardvark Safaris, a high-end Africa travel business. The negotiations for the Aardvark acquisition took place shortly after our investment, closing in early 2016. The acquisition marked Scott Dunn’s first sales operation outside the UK, and just two years later revenues had grown five-fold.
Inflexion were very helpful; they really took the time to understand our focus on values rather than just size and prices. Xuan Ye, Inflexion’s in-country Asian expert, proved invaluable in identifying targets which were congruous with the Scott Dunn aims and ethos.
Next on Scott Dunn’s target list was Asia, drawn by the market’s growing affluence and increased desire for luxurious international travel. To test the market, Inflexion and management initially opened a small office in Singapore with four people in it in September 2016. It worked well and so a permanent presence was on the cards.
Reed & Mackay
Reed & Mackay is a premium corporate travel management company which delivers a personalised service through cutting-edge technology. The firm partnered with Inflexion in August 2016 to drive its international expansion and enhance its digital offering.
It quickly became clear we needed to move faster to remain at the top of our game, so in 2016, we partnered with Inflexion. They seemed an excellent fit, not only because of their sector experience – they were already working with three other travel businesses – but also because of their track record in helping businesses expand internationally as well as enhance their digital offering.
Things moved quickly after the partnership: less than six months after Inflexion’s investment, the entire Reed & Mackay team got involved in an Inflexion-inspired ‘five-day challenge’. Getting the entire team involved rather than a single person or team meant the buy-in, genuine understanding and enthusiasm was widespread.
Plans were agreed for international expansion and digital enhancement. Since January 2017 we have supported Reed & Mackay to identify, negotiate and agree four add-on acquisitions, helping the business grow from just two UK offices to locations in Paris, Frankfurt, Sydney, Singapore, the UAE and US. Most recently the firm added Hillgate Travel, a London-based provider of premium travel management services to corporate clients, to its group, thereby enhancing Reed & Mackay’s core market coverage.
Alongside supporting acquisitive growth, Inflexion’s Digital Director has worked with management to enhance the group’s digital offering, to anticipate the current and future needs of both travellers and bookers. After launching its latest app, user numbers doubled in a three-month period, and in the US, mobile has proven more popular than desktop, with 75% of self-made bookings coming in through the app.
Huws Gray is the largest independent builders merchants in the UK. In April 2018, Inflexion made a minority investment to support its growth plans.
Huws Gray was established in 1990 on Anglesey, Wales, and today is the largest independent builders merchants in the UK by number of sites. The firm prides itself on being a one-stop shop for customers, supplying everything from below-ground drainage products to bricks and blocks, doors, windows and roofing materials. In 2018 the management were looking for an investor to help it expand its UK footprint beyond Wales and North West England.
At the very start we wanted a majority investor. But as we went through the process, we realised a minority investor gave us a more appealing return.
Since the partnership in April 2018, Huws Gray has moved quickly, acquiring five independent firms in under six months. Their most recent acquisition of Ridgeons, was transformational, doubling the size of the business overnight and making Huws Gray the largest independent builders merchant in the UK.
Ridgeons, an independent family-owned timber and builders merchant, has substantially enhanced Huws Gray’s UK footprint adding over 40 mixed branches in East Anglia.