Inflexion moves into acquisition mode

The firm is looking for buys following 12 exits made in the past 18 months.

Inflexion Private Equity is moving into an acquisition phase following its latest exit of its investment in On the Beach on 23 September through a £240 million ($366 million; €328 million) initial public offering (IPO).

“It’s a busy couple of months ahead,” Inflexion managing partner Simon Turner told Private Equity International referring to the firm’s acquisition plans. “The next news flow will be about buying.”

Inflexion acquired online travel agent On the Beach in October 2013 from Livingbridge (then Isis Equity Partners) for £73 million. The realisation of its investment generated a 3.6x return and an internal rate of return of 84 percent, Inflexion said.

It is the firm’s fourth exit through an IPO in the past 18 months, and brings its total number of realisations to twelve over the period, with a combined enterprise value of £1.7 billion, the firm said. Its other investments exited through IPOs were in NAHL Group, FDM Group and Sanne Group.

“In every case they have traded up,” Turner noted.

When asked what determines whether the firm pursues an IPO or private sale, Turner said: “There’s a discussion with other stakeholders and the management team might have a strong view. It is valuations and demand and some [companies] want to stay private and others feel the visibility of the public market can do something for them, and that is definitely the case for On the Beach, which is consumer-facing.”

The IPO of On the Beach follows Inflexion’s announcement yesterday that it was selling home shopping channel Ideal Shopping Direct to Blackstone, as reported by Private Equity International.

The firm has two businesses left in its 2006 vehicle, and is harvesting its 2010 fund that has nine investments left, Turner said.

Inflexion Private Equity III is a 2006 vintage, £165 million fund, while Inflexion 2010 Buyout fund is a £375 million vehicle, according to PEI’s Research and Analytics division.

The firm is currently investing through its 2014 Inflexion Partnership Capital Fund I, a £400 million vehicle, and Inflexion Buyout Fund IV, a £650 million fund launched in 2014, according to PEI Research.

In March, IPCF I, which is focused on UK mid-market minority investments, completed its first deal acquiring a stake in events company CloserStill from Phoenix Equity Partners, as reported by PEI.