Inflexion nets 84% IRR following On The Beach IPO

Greg Gille
23 September 2015

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On the Beach, a UK travel agent backed by Inflexion Private Equity, has floated on the London Stock Exchange with a ТЃ240m market cap.

The company placed 52 million shares priced at 184 pence apiece, raising £90.2m. The placement mainly consisted of existing shares, with £83.8m going to existing shareholders.

Numis Securities acted as sponsor, global coordinator, bookrunner and broker on the IPO.

Inflexion, which retains a 37% stake in the business, stated that the IPO allowed it to reap a total realised and unrealised return of 3.6x, with an IRR of 84%. The private equity house has been invested in the business for slightly less than two years.

The GP has been on a divesting spree in recent months: a day prior to the listing of On The Beach, Inflexion announced it had sold UK multi-channel retailer Ideal Shopping Direct to Blackstone, a deal believed to be worth in the region of £150-200m. The GP has realised eight exits since January.

The IPO also marks the fourth flotation of an Inflexion portfolio company in the past 18 months; previous listings include National Accident Helpline, FDM Group and Sanne, with the latter allowing Inflexion to post an 80% IRR.

Previous funding
Inflexion acquired On The Beach in a £73m secondary buyout from Livingbridge in October 2013, with the vendor reaping a 3x return and an IRR of 20%. The transaction was supported by senior debt facilities from Lloyds.

Since then, Inflexion claims it has supported investment in R&D, brand awareness and digital improvements, including the appointment of a head of mobile to boost this traffic source. The GP also appointed Richard Segal as chairperson.

According to Inflexion, the company's workforce has doubled since the 2013 buyout while EBITDA for the nine months to June 2015 grew by 45% compared to the same period in 2014.

Company
On The Beach is an online travel agent focusing on short-haul beach destinations, serving UK holiday-makers. The company also entered the Swedish market in early 2015.

Established in 1995 and based in Cheadle, Manchester, the company posted a £45.8m turnover in the year ending September 2014, with an EBITDA of £13.4m.

People
Simon Turner, Catherine Richards and Gareth Healy worked on the IPO for Inflexion.