Inflexion sells down £42m On The Beach stake

Kenny Wastell
19 May 2017

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Inflexion Private Equity has sold down an 8.7% stake in listed UK-based travel retailer On The Beach for ТЃ42m.

The partial divestment comes two months after the vendor sold an 11.8% stake in On The Beach for £42.9m.

Following the latest placement, the GP will retain a 2.9% stake in the company, which will be subject to a 90-day lock-up period.

The transaction values shares in the business at 365 pence apiece, almost double the 184 pence price at which they were valued at the time of its IPO. At the time of the company's flotation, Inflexion said the offering represented a realised and unrealised return of 3.6x, with an IRR of 84%.

The GP floated On The Beach with a £240m market cap in September 2015, generating £90.2m in returns, and has since been gradually reducing its stake in the firm. On the morning of 19 May 2017, the group had a market cap of £496m.

In the two-year period between Inflexion's acquisition and the subsequent IPO, the GP supported investment in R&D, brand awareness, team expansion and digital improvements, including the appointment of a head of mobile to boost traffic. The firm also appointed Richard Segal as chairperson.

Earlier this month, the company bolted on another online beach holiday retailer, Sunshine.co.uk, in a £12m deal.

Numis acted as sole global coordinator in the latest offering.

Previous funding
On the Beach was acquired by Livingbridge in 2007 in a deal believed to be worth around £40m.

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

Company
Established in 1995 and based in Cheadle, Manchester, 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.

On The Beach's revenues increased by 13% to £71.3m in the year to September 2016, with group operating profit before amortisation and exceptional costs rising 30.3% to £22.8m.

People
Inflexion Private Equity – Simon Turner (managing partner); Catherine Richards, Gareth Healy (partners).