A highly successful partnership with Inflexion saw Automotive Transformation Group become the clear global leader in automotive retailing solutions through three acquisitions, international expansion and investment in digital. Ebitda grew 4x before its sale to Keyloop this year.

Inflexion’s investment in Autofutura in 2019 marked the start of its journey to dominate its niche, with the transformational acquisition of GForces the following year a statement of the team’s ambitions. They barely tapped the brakes as 2021 saw the acquisitions of Chrysalis and Salesmaster, with the enlarged group rebranded as Automotive Transformation Group (ATG).

The five-year partnership saw significant M&A, technology enhancement and international expansion as Inflexion co-piloted ATG’s race to market leadership. The innovative technology business’s journey saw Inflexion support the integration and global roll-out of ATG’s technology to deliver the first truly omnichannel retail solution for the automotive industry as well as international expansion across Europe and the Middle East.

“The whole period at ATG felt like a sprint, but if you want to succeed you need that pace to ensure no one else overtakes you. We had goal harmony with Inflexion and the team and it worked very well,” explains Tim Smith, Chief Executive at ATG and a self-proclaimed petrolhead-turned-technologist.

M&A was a big part of the journey. “Inflexion’s vision was always to build an integrated e-commerce SaaS business with scale through acquisitions,” recalls Mitch Titley, CFO. He explains the importance of ensuring the platform had a robust financial and management reporting base with strong management information, and he was brought on board owing to his background and ability to deliver the transactions and integrations.

Finding the right targets wasn’t straightforward. “We had looked at a number of businesses to acquire and most of them lacked the right quality products, the right talent and the scale we needed.” GForces provided all three.

“Inflexion were instrumental in sourcing GForces and getting the investment structure right. Their view was very much that management run the business and they’d manage the acquisition,” Mitch recalls.

The purchase was followed immediately by another acquisition, then the merger and launch of ATG before a third acquisition. Mitch and the team were more heavily involved in the others, especially Chrysalis. “What I love about Inflexion is they are a great help strategically and with acquisitions, but let us get on with the operational day-to-day of the business,” Mitch enthuses.

Growing pains

Integration was a challenge since a robust technology platform to add the acquisitions onto was not initially in place, forcing them to build as they went. Mitch likens this to ‘building the plane while we were flying’.

Even the systems, normally the straightforward part of the integration, needed a lot of work. “The finance systems were all different and none were adequate, so we had to find and roll out a new one. The management information was poor and needed aligning across the businesses. The HR system was inadequate so we replaced that too.”

Indeed ATG found it had four businesses with different cultures and organisational structures that needed crunching together, whilst bringing all the key people along for the journey. Ultimately it took a full year for the management team structure and roles to settle down into a sensible format with Inflexion supporting the build-out of the senior team.

Integrating the products was key to maximising synergies, and this behemoth task continues today. Inflexion supported £8 million on engineering spend to pursue a quantitative approach leading to clear EBITDA improvement and the team growing to 146 FTEs today. A further £1 million was spent on cloud investment.

Going global

The scale of the combined business proved crucial to ATG’s global expansion as larger enterprise customers now had a partner with genuine global reach. ATG’s mainland Europe business tripled sales over four years, with the firm’s technology chosen by automotive retailers, OEMs, financiers and fleet suppliers in more than 80 countries and at over 10,000 retail locations. Clients include Mercedes Benz, Jaguar Land Rover, Ford Credit, Marshall Group and Jardine Motors.

Before Inflexion’s support, Tim estimates all four businesses generated c. 75% of revenues domestically, but this ratcheted down over time. “Expanding our geographic footprint has been a real generator of growth,” he says.

The geographic expansion was carefully planned, with focus rationalised to focus on core markets of the UK, Europe and MEA (the Middle East and Africa).

Its journey has made ATG the partner of choice for retailers shifting from a traditional retail model to a fully integrated, omnichannel, e-commerce-led model. Mitch admits it’s a well-trod path in other sectors, but that automotive has been playing catch up.

“We wanted to put the pieces of tech in play and give them a wrapper to make it easy for consumers to transact and own the vehicle. Then at the end of the cycle come back and buy another car,” Tim explains. He adds that by automating a lot of processes, dealers get marginal gains for providing services around selling cars, such as the after-sales and services. By integrating all the tech into a single stack it is simpler to use and to harness valuable data from.

“Retaining customers is more cost-effective and brings a lower cost to serve rather than acquiring new. Using our tools software and services helps us increase our margins whilst doing a good job for our clients,” Tim says.

Inflexion supported ATG’s progress in the technology space, firstly by bringing GForces into the fold initially and combining e-commerce with the tech plan, and then by investing to get the group where it wanted to be – for example with significant investment into the Vietnam engineering team and growing the development team from a standing start to over 60 developers.  

“They backed us and invested for growth as they had the confidence we were on track.''

Tim Smith, Chief Executive, ATG

Ultimately the five-year investment period saw margins grow by 30%and recurring revenues hit 90%. Inflexion’s strategic guidance and network helped the business come together with Keyloop, global automotive technology company, in May 2024. Keyloop is itself backed by Francisco Partners, and Inflexion’s relationship with that financial backer helped bring the highly complementary businesses together. 

Mitch describes it as “the perfect fit”: “Our cultures work and the products and geographic spread are complementary. It makes perfect strategic sense.”