Phoenix nets 3.5x on CloserStill

The stake in UK-based media and exhibitions business is the first deal from Inflexion’s Partnership Capital Fund I

UK-based mid-market firm Phoenix Equity Partners has agreed to sell its stake in media and exhibitions business CloserStill Media to Inflexion, according to statements from the firms.

Market sources indicate that the deal values CloserStill at more than £100 million (€139 million; $151 million) and will generate a return of more than 3.5x for Phoenix.

Phoenix declined to comment on the transaction.

Founded in 2008 and headquartered in London, CloserStill specialises in professional events primarily for the healthcare and technology markets. Phoenix acquired its minority stake in the business in 2012, using capital from its 2010-vintage £450 million (€626 million; $680 million) Phoenix Equity Partners 2010.

Under Phoenix’s ownership CloserStill revenues trebled and profits quadrupled. In 2013 the company held its first international event, and now generates 20 percent of its revenue internationally through events in France, Germany and Singapore. Within the UK the company strengthened its position through six new show launches and six bolt-on acquisitions. Since 2012 staff numbers have more than doubled from 62 to 134, and visitor numbers have increased from 45,096 in 2012 to 82,117 in 2014.

This is Inflexion’s first deal from its £400 million (€556 million; $605 million) Inflexion Partnership Capital Fund I, a vehicle dedicated to UK mid-market minority investments which closed in September last year. It is understood that Inflexion will acquire a stake of just under 50 percent.

The firm’s investment will “support further organic growth in CloserStill’s young and vibrant exhibitions portfolio”, taking advantage of renewal rates and high demand, as well as enabling continued innovation through “geo-cloning” successful events in other markets and facilitating targeted acquisitions, according to a statement from the firm.

“It’s a classic Inflexion deal in many ways. It was a first-class management team in there, the current chairman and the CEO who originally founded the business, and they’ve really grown it very successfully over the last seven to eight years,” Inflexion managing partner Simon Turner told Private Equity International. “It’s a business that has a terrifically high momentum, so it’s generating compound growth rates of around 50 percent in terms of EBITDA growth. It’s got this great organic momentum, and we love that combination of an entrepreneurial team with a real vision and existing growth.”

Turner added that Inflexion’s offices in India, China and Brazil offer the opportunity to grow the business much more strongly outside the UK.

Last September Inflexion also closed its flagship fund, Inflexion Buyout Fund IV, on its hard-cap of £650 million.

“The next buyout deal that we do will go into that fund,” Turner said.

Last month the firm sold its investment in Aspen Pumps to 3i Group for £105 million (€143 million; $162 million), netting a 14x return, and in June 2014 generated 16.2x through the flotation of IT services company FDM on the London Stock Exchange.

In June 2014 Phoenix exited Precise Media Holdings, a provider of media monitoring and analysis services to London-listed global marketing services group WPP. In April, the firm also sold NFT Distribution Operations Limited, a UK-based chilled food distribution business, to private investment boutique EmergeVest. It’s understood that these exits generated returns of 2.5x and 2.2x respectively.

DC Advisory and Mayfield Media Strategies advised Phoenix on the sale, with Addleshaw Goddard and Kerman & Co providing legal advice, and KPMG and Armstrong Transaction Services carrying out due diligence.

Inflexion was advised by Trillium Partners, PwC, Jones Day and AMR International.