Hg sells Intelliflo to Invesco

Kenny Wastell
06 June 2018

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Hg has sold Intelliflo, a UK-based developer of front- and back-office software for financial advisers, to US asset management company Invesco.

Financial details of the transaction remain undisclosed, though according to a recent report by Unquote sister publication Mergermarket, Intelliflo was marketed based on an EBITDA figure of £10-12m and was expected to achieve a valuation of around 15x.

The transaction is the sixth exit for the vendor's Hg Mercury 1 Fund, a £380m vehicle that held its final close in March 2013. According to a statement issued by Hg, the sale brings the gross realised fund multiple of Mercury 1 to 3.4x with a 44% gross IRR.

Under the GP's tenure, Intelliflo has invested in product development, marketing and sales activity, and its operational practices. According to a statement, Intelliflo generated a compound annual growth rate of 19% across the last three years, with 91% of its income accounted for by recurring revenues in 2017.

Under its new owners, the company will look to expand its sales network into new international markets.

A spokesperson for Hg declined to comment on returns generated from the sale, the deal valuation or the EBITDA figure on which the transaction was based.

Previous funding
Hg acquired a majority stake in Intelliflo via a management buyout in July 2013, with the company's management retaining a significant stake as part of the deal.

Company
Founded in 2004 and headquartered in Kingston-upon-Thames, Surrey, Intelliflo's financial advisory software incorporates client relationship management, financial planning, client reporting, portfolio valuation and automated advisory services. It has around 2,000 clients including Legal & General, Nationwide Building Society and SimplyBiz.

According to publicly available documents, Intelliflo generated EBITDA of £5.3m in 2016 from a turnover of £18.8m.

People
Hg – Sebastien Briens (partner).
Intelliflo – Nick Eatock (founder, executive chairperson); Hamish Purdey (CEO).
Invesco – Colin Meadows (senior managing director, chief administrative officer); Martin Flanagan (president, CEO); Andrew Schlossberg (senior managing director, head of EMEA).

Advisers
Vendor – Evercore (corporate finance); Linklaters (legal); Deloitte (tax).
Management – Fieldfisher (legal).