Uncertainty often heightens the desire for external support. Whether it’s funding for replacing shareholders, releasing equity, or even for growing acquisitively or geographically, private equity can help. And it needn’t mean ceding control.

Inflexion benefits from three focused fund strategies: Buyout; Partnership Capital, its dedicated minority investment fund; and Enterprise, its lower mid-market fund.

In its nearly ten years of operation, Inflexion Partnership Capital has never been more active. The dedicated minority capital offering was launched to cater to a then new-but-growing demand for capital that allowed owners to remain at the helm. PE had become understood in the decade prior, albeit in the business of buyouts that offered capital and expertise at the cost of control. In the years since, demand has grown steadily as an increasing number of owner-managers realise you can have your cake and eat it with minority funding.

As a trailblazer in the space in Europe, Inflexion’s Partnership Capital Funds have made 20 minority partnerships to date.

Proteros: This year kicked off with the announcement that Inflexion partnered with Proteros to support its growth, with a focus on international expansion both organically and through acquisition, particularly in the US. The investment is Inflexion’s third investment in the healthcare sector in the last 12 months following its backing of Upperton and SteriPack in 2022.

YER: The end of 2022 saw Inflexion provide Partnership Capital to YER, a Dutch recruitment specialist. Inflexion is working with management to support YER’s growth by further developing existing and new customer relationships and through continued international expansion, both organically as well as through selective M&A.

Digital Wholesale Solutions (DWS): Two years ago Inflexion provided minority funding as part of a corporate partnership to spin out IT, communications and cloud wholesale platform DWS from its then-parent Daisy Group. The partnership has seen a buildout of the leadership team, long-term investment in the firm’s technology platform and creation of a data team – helping drive 14% revenue and EBITDA growth in DWS’s first set of results since the demerger.

Phenna Group: Last year saw the phenomenally successful sale of following just 18 months of a minority funding partnership with Inflexion that saw 23 acquisitions help to double EBITDA for the TICC specialist.

Proteros

In January 2023, Inflexion announced a minority investment into Proteros Biostructures GmbH, a leading Germany-based, founder-led contract research organisation focused on early-stage drug discovery.

As a specialist in structural biology, Proteros has created a cutting-edge platform recognised globally by both large pharma and biotechs as capable of unlocking the most technically challenging drug targets. The firm supports many of the world’s top 20 largest pharmaceutical companies and over 200 pharma and biotech partners in the US, Europe and Japan to reach the right results and accelerate their overall research timelines, helping them to lead optimisation and clinical programmes. The firm was founded in 2000 by Dr Torsten Neuefeind (CEO) and Nobel Laureate Prof. R Huber, and today it boasts leading technologies that enable users to map the shape of a drug target with a high degree of precision.

“Proteros have not only pioneered much of the science in the filed but they’ve learned how to industrialise the process of producing structural biology images,” enthuses Ben Long, Partner at Inflexion.

It’s a case of knowledge and experience, according to Torsten: “Protein structures matter for improving identification of drugs. We provide a picture of the key and the lock, with our experience meaning we now have a critical mass of more than 1,000 structures a year.” Something he acknowledges few have. 

The business started in Germany, then Europe and now 60% of its business comes from the US. Extending this further and getting closer to the customers is a big part of the firm’s strategy. “We need fresh support for this growth. Inflexion stands for industrialising the growth of mid-sized companies in a systematic manner so to find them was a good fit,” says Torsten, who will continue to lead the company as Founder and CEO and retain the majority shareholding in Proteros.

With Inflexion’s support, Proteros aims to scale globally both organically and through acquisition, particularly in the US. The firm is also drawing on Inflexion’s proven expertise in healthcare and commercial strategy to further strengthen Proteros’ overall value proposition for its blue-chip customer base.

We needed fresh support for our growth and Inflexion stand out for industrialising the growth of mid-sized companies in a systematic manner. Finding them is a good fit.

Dr Torsten Neuefeind, CEO, Proteros

YER

In December 2022, Inflexion made a minority investment into YER, a leading Netherlands-based specialist secondment and recruiting agency.

Founded in 1987, YER offers high scarcity talent in undersupplied fields such as engineering, IT, public sector and finance to a range of specialist end market verticals. The business has over 950 clients including ASML, Bosch, DAF, KLM, VDL and Rabobank, and operates internationally from nine local offices in the Netherlands, four in the US and one in Belgium.

YER’s leadership team were drawn to Inflexion’s rich experience in its sector, with successes including FDM, K2 Partnering Solutions, Red Commerce, Sparta and Calco all strings in its bow.

The management team, led by CEO Johan Overgaauw and founder Jaap Kooijman, will work closely with Inflexion to further develop existing and new customer relationships and through continued international expansion, both organically as well as through selective M&A.

“We have been building an international recruitment agency for 35 years and decided ten years ago to go into a secondment agency for temporary positions. We focus on IT skills and usually place professionals for one or preferably two years. In a market of scarcity, it’s a way to source talent which they can try,” Jaap says.

The firm has grown rapidly in the decade since its foray into temporary: in 2012 it placed 250 people with clients and that swelled to over 3,000 by 2022.

This strong growth meant lots of investors were interested.

We had many conversations with private equity over the years, but meeting Sander and learning about Inflexion’s unique minority solution and its relevant sector experience was different. They truly understand the language and how it works.

Jaap Kooijman, Founder, YER 

A lot of scarcity in IT means a lot of business for the coming years. YER intends to grow its domestic business and US operations and has a keen eye on the German market for future expansion.

Digital Wholesale Solutions (DWS)

DWS’s carve-out was announced in March 2021 supported by a minority capital investment from Inflexion Partnership Capital as a strategic partnership alongside shareholders of former parent Daisy Group.

DWS had grown within Daisy over 10 years, with management operationally separating the business two years before the legal demerger. Discussions with investors for a carve-out took place in 2020 and lockdown actually proved helpful, owing to the efficiency of remote meetings. “Inflexion stood out in a competitive process as the most interested in our business and with the experience and willingness to invest in a business fresh from a demerger,” recalls Nathan Marke, Chief Operating Officer at DWS.

Daisy’s founder Matthew (Matt) Riley said of the initial discussions: “The best Private Equity I have dealt with are the ones that have a bit of emotional intelligence, and that’s one of the big things we found with Inflexion. We actually liked the people we were talking to and they understood what we were trying to achieve. It’s really important as they actually listened.”

Inflexion hold a significant minority stake in DWS – with Nathan suggesting their input is more significant than minor.

I’ve worked with Private Equity-backed firms before and Inflexion don’t behave like a minority investor. They’re very interested and engaged in what we do. We feel we have the best of both worlds – a diverse group of shareholders providing expertise and all working toward a common aim. I think Inflexion get the balance right.

Nathan Marke, Chief Operating Officer, DWS

The partnership is paying off, with the company’s first set of results since its demerger reporting revenues and adjusted EBITDA growing organically by 14% in the year to 31 March 2022, with all of its key product lines achieving double digit revenue growth. The leadership team puts it down to myriad factors, including the success that DWS’s customers, expert technology resellers in the UK, are having in winning over SMBs, and payback from long-term investment in the firm’s technology platform, which the firm says makes DWS simple to do business with. The investment and hard work continue to drive growth, with DWS reporting a strong first half of the current financial year.

DWS’s future will include continued organic growth in the market as the firm looks to scale its cloud category. The firm is also keeping an eye on strategic M&A opportunities. A core focus will be on improving its already strong NPS (Net Promoter Score) because, as Nathan says, “looking after our partners comes before everything else.”

Phenna Group

Inflexion's Partnership Capital Fund took a minority stake in Phenna Group in 2021 before selling its investment in the business in 2022 to Oakley Capital in a transaction that values Phenna at over £1 billion.

Formed in 2018 and headquartered in the UK, Phenna consists of a broad range of TICC businesses currently serving the industrial manufacturing and built environment markets. The company is a strong consolidator of the highly fragmented TICC industry and during its 18-month partnership with Inflexion, acquired 23 niche, independent TICC businesses in six countries.

The founder had set up Phenna to drive a business forward under his own steam, and so was drawn to Inflexion’s genuine minority capital offering.

Additionally, Inflexion was particularly well position positioned to help Phenna drive forward its ambitious growth plans due to its substantial experience in the sector following investments in Alcumus, British Engineering Services and Cawood Scientific. Inflexion’s significant M&A experience was also tremendously helpful in turbo-charging Phenna’s growth, helping it to expand geographically and into new end-market sectors. Inflexion also supported the build-out of the leadership team, including the appointment of a seasoned Chair.

In a short space of time, EBITDA doubled and headcount tripled.

Inflexion’s impressive experience in similar businesses and their minority offering made them the perfect partner. Their knowledge of our sector and support in accelerating our M&A journey exceeded my expectations.

Paul Barry, Founder, Phenna