ISIS books sunny return from online travel agent

ISIS Equity Partners has sold On the Beach to fellow UK-based Inflexion Private Equity for £73m, netting ISIS a 3x return and a 20% IRR.

Inflexion Private Equity, a UK mid-market firm, has acquired online travel agent On the Beach from ISIS Equity Partners for £73 million (€86 million, $117 million).  
The exit has generated a 3x return and a 20 percent internal rate of return for ISIS, according to a statement. 

DC Advisory, which advised ISIS on the sale, said that it approached a number of international strategic and financial buyers as part of a “tightly managed” auction process. DC also organised a staple debt package for the deal.  

The sale of On the Beach attracted “a couple of well known UK mid-market players”, Wol Kolade, ISIS' managing partner, told Private Equity International

ISIS invested in On the Beach in 2007 using its £238.5 million Fund IV, a 2007-vintage. This is the second exit from that fund, which has now returned “well over half of the capital”, Kolade said. There are nine investments left in the vehicle, he added.  

On the Beach is an online travel site for short-haul packaged beach holidays. Under ISIS' ownership, On the Beach has grown its sales from £78 million to £280 million. The business has benefited from the ongoing shift whereby consumers are booking their holidays online rather than through high street travel outlets, Kolade said.  

Online bookings now account for around 45 percent of the total packaged beach holiday market in the UK and this segment is expected to grow at around 10 percent per annum over the coming years, Inflexion said in a statement. The firm made its investment from its £375 million buyout fund, a 2010-vintage.    
“The company has an exceptional management team which has developed a sophisticated and well-invested technology platform. Following our investment, we’ll support them to further grow the business in the UK, explore opportunities for international expansion and, with the help of our digital director, ensure the business is digitally optimised,” Simon Turner, Inflexion’s managing partner, said in the statement.  

Inflexion was advised by PwC, Pinsent Masons and BDO. Senior debt facilities were provided by Lloyds.