Inflexion generates 7.7x return on fifth exit this year

Inflexion is delighted to announce it has signed an agreement to sell Reward Gateway, the employee engagement technology specialist. The transaction is valued at £140m, which will generate a return on our original investment of 7.7x with a 59% IRR.

Inflexion invested in Reward Gateway in December 2010. The company was founded by Glenn Elliott in 2006 and is now a leading provider of mobile optimised, SaaS employee engagement software used by corporate HR departments to attract, engage and retain their talent. The company’s services power employee benefits, recognition and communications on behalf of more than 1,100 of the world’s top employers, including American Express, Discovery, AOL and IBM.

Throughout Inflexion’s four year tenure, we actively partnered with Glenn Elliott and his entrepreneurial management team and Reward Gateway achieved exceptional growth. The company enhanced its product suite and expanded its international footprint recording a fourfold increase in EBITDA, while employee numbers rose from 64 at investment to 275 today.

Complimentary acquisitions and international expansion are core to Inflexion’s growth strategy and Reward Gateway acquired two businesses, one of which doubled the size of the company in Australia. Further international expansion saw the company open a local U.S. office in 2014 while continuing to grow market share in the UK through client retention and new client wins.

Simon Turner, Managing Partner at Inflexion commented “Reward Gateway is a classic Inflexion investment. We partnered with a top class management team to help accelerate growth in a terrific business both internationally and through acquisition. We have enjoyed a very successful relationship with Glenn and the team, supporting the company’s U.S. launch and two acquisitions, whilst growing profits and employee numbers. The U.S. market offers the company another exciting growth opportunity and we wish the team every success in the next stage of their development.”

Glenn Elliott, founder and CEO of Reward Gateway commented “We’ve had an amazing four years with Inflexion and we are a stronger and more successful company thanks to their support. Their backing has enabled us to invest heavily in expanding the services we provide to HR and scale the business internationally. We are really excited about continuing in this form with the support of Great Hill.”

The sale process was led for Inflexion by Christian Hamilton. Inflexion was advised by Robert W Baird.

Within 18 months Inflexion has sold 9 investee companies for an aggregate EV of £1.3bn, to acquirers which include both U.S. and Chinese corporations, as well as coordinating three successful UK flotations.