UK-based Inflexion Private Equity has sold its investment in Aspen Pumps to 3i Group for £105 million (€143 million, $162 million).
Inflexion hired Catalyst Corporate Finance to run a limited auction process, which attracted interest from both UK-based private equity firms as well as US-based GPs, Simon Turner, Inflexion’s managing partner told PEI. The sale has netted Inflexion a 14x return.
3i made the all-equity investment from its balance sheet, according to a source close to the deal.
Aspen Pumps is a global manufacturer of air conditioning pumps. Based in Hailsham, Sussex, and established in 1992, the company sells its products in more than 100 countries. Aspen has achieved significant growth, with organic sales CAGR of 12 percent between 2009 and 2014, and delivered EBITDA of £10 million in the year ended 31 December 2014, according to a 3i statement.
Inflexion acquired a 55 percent stake from the founding entrepreneur in 2007, using its Inflexion Private Equity III, a £165 million 2006-vintage. In 2011, Inflexion did an interim deal, in which it bought out the owner completely, giving it an 85 percent stake in the business.
Under Inflexion’s ownership, the company has followed an internationalisation strategy, focused on new digital product development as well as on add-on acquisitions. Aspen launched in China and India and saw its pump sales produce a fourfold increase.
Inflexion also helped Aspen Pumps to build a digitally-led new product pipeline and negotiated two add-on acquisitions, broadening Aspen’s product offering and enhancing customer service.
“We are very proud of [the investment] — not just because of the numbers – but it’s a very typical deal we would do. Partner with the entrepreneur, help transition and evolve the management team, make some acquisitions, internationalise and then we sold in a very smart way shoulder to shoulder with the management team,” Turner said.
3i aims to help Aspen to build on its market leading position and further penetrate international markets in Europe, the Americas and Asia through a number of organic and acquisitive initiatives, the group said.
Inflexion’s 2006-vintage fund also included FDM Group, a UK-headquartered IT services company which Inflexion listed on the London Stock Exchange last year, netting a 16.2x return.
Last September, Inflexion’s flagship fund, Inflexion Buyout Fund IV, closed on its hard-cap of £650 million, while Inflexion Partnership Capital Fund I, which will make minority investments in the UK mid-market, closed on its hard-cap of £400 million.
Inflexion typically invests between £15 million and £75 million in high growth, entrepreneurial businesses. It targets buyouts, as well as minority investments through its partnership capital team. The firm invests across different sectors from offices in London and Manchester. Inflexion also has teams in Bangalore, São Paulo and Shanghai for portfolio development.