Driving strategic partnerships with minority capital

De-mergers and partnerships are complex, but a supportive and experienced private equity firm can help enable phenomenal results 

Today’s backdrop may catalyse many corporates to seek external funding, whether it’s for replacing shareholders, releasing equity, or to support growing acquisitively or geographically. Others may be seeking independence from a parent, confident that the perseverance and patience of an experienced backer could boost their potential. But not all are willing to cede control in order to realise their ambitions.

“Corporate partnerships are an exciting and growing specialism,” enthuses David Whileman, Partner and head of Inflexion’s Partnership Capital. The firm knows this well, having announced three such transactions in under three years.

And while the fresh entity benefits from the laser focus of a well resourced private equity firm, the former parent may find additional rewards through a boost in share price, as has been the case for a number of plcs offloading noncore assets.

Inflexion’s most recent corporate partnership was announced with Allen & Overy (A&O), with Inflexion’s Partnership Capital fund making a strategic minority investment alongside the magic circle law firm and US-based investor Endicott Capital. The innovative transaction allows A&O to retain a significant stake in aosphere, the business it created in 2002, and Inflexion’s experience in supporting the hairy busyness of extricating systems and building standalone new ones, leadership can continue to focus on day-to-day business and look ahead to future growth as an independent entity. And once the carve-out is complete, they’ll hit the ground running with full access to Inflexion’s value acceleration resource as though it were a majority transaction.

“This partnership creates a significant opportunity for us to accelerate our growth and offer our clients more choice, more value, and more impact. Inflexion shares our vision of providing with the most comprehensive, reliable, and user-friendly legal and regulatory information and services,” says Marc-Henri Chamay, Chief Executive of aosphere. Plans include creating a scaled, global regulatory data business across a range of cross-jurisdictional topics, with investment earmarked for strengthening and expanding its product. Aosphere is also looking to grow the business in the US and through acquisition.

Inflexion have proven success in driving strategic partnerships, with the Giacom journey a case in point. Inflexion’s investment in Giacom (then Digital Wholesale Solutions) was announced in 2021 and supported by a minority capital investment from Inflexion Partnership Capital as a strategic partnership alongside shareholders of parent Daisy Group.

Giacom had grown within Daisy over 10 years, with management starting the process of operationally separating the business two years before the legal demerger. “Inflexion stood out in a competitive process as the most interested in our business and with the experience and willingness to invest in a business fresh from a demerger,” recalls Nathan Marke, Chief Operating Officer at Giacom.

It’s been a wildly successful journey since, with Nathan suggesting Inflexion’s minority stake belies its maximum impact: “I’ve worked with private equity-backed firms before and Inflexion don’t behave like a minority investor. They’re very interested and engaged in what we do. We feel we have the best of both worlds – a diverse group of shareholders providing expertise and all working toward a common aim. I think Inflexion get the balance right.”

The partnership is paying off, with the company’s first set of results since its demerger reporting revenues and adjusted EBITDA growing organically by 14%, with all its key product lines achieving double digit revenue growth. The leadership team puts it down to myriad factors, including the success that Giacom’s customers, expert technology resellers in the UK, are having in winning over SMBs, and payback from long-term investment in the firm’s technology platform, which the firm says makes Giacom simple to do business with. The creation of a data team has improved partner interaction, and a platform is being created with the aim of becoming a one-stop shop for tech resellers.

Looking ahead, the Giacom team sees tremendous scope for continued organic growth in its home market, having completed two UK acquisitions.

A similarly successful corporate partnership is underway at Curinos, which also received minority capital in 2021 from Inflexion’s Partnership Capital. FTSE 100 business Informa PLC chose Inflexion as its partner to create a market-leading financial data and technology provider by bringing together two complementary businesses: Informa Financial Intelligence’s Financial Benchmarking & Omnichannel Experience (FBX) and Novantas Inc, a financial data services company. The complex deal meant experience in the art of carve-outs would be a great advantage, and Informa were drawn to Inflexion’s track record in the space. Additionally, expertise in scaling data businesses as well as a US presence meant we were very well placed to partner with the corporate for this. The business rebranded as Curinos, with the carve-out and subsequent integration well on its way to creating a financial data and technology leader.

Curinos is working alongside Inflexion and Informa to address a substantially untapped market by launching new products, and investing in sales to drive first-time adoption of outsourced analytics.

Inflexion is orchestrating its value acceleration levers to drive success, with the initial carve-out of FBX and merger with Novantas. Looking at international growth, the new entity has created a US-headquartered market leader in financial data technology, while Inflexion’s digital team is supporting the creation of a unified data fabric to support product integration and boost cross-selling.

“Inflexion have been inquisitive and quite curious about how they can add value and how they can help, be it future M&A or operational expertise,” enthuses Curinos Chief Executive Craig Woodward. “Inflexion have been terrific and our work together is not done by any stretch.”