Hudson Hill Capital (“Hudson Hill” or “HHC”), a private investment firm founded by Eric Rosen, acquired a majority stake in InXpress Holdings Ltd, a software-enabled global franchisor of transportation and logistics services, in partnership with the company’s senior management team. The transaction reinforces InXpress’s long-term commitment to provide world-class transportation and logistics solutions to small and medium sized businesses.
Based in Manchester, U.K., InXpress is an international franchisor of parcel, freight, and delivery logistics services serving SME customers through a software platform and global network of nearly 400 franchises in 14 countries. Established in 1999, the company maintains relationships with tier-one parcel, air, and freight carriers around the world, offering discounted rates to franchisees that form relationships with SME customers through its direct salesforce.
An Interview With Alexander Stacy, Principal at Hudson Hill Capital
What was the thinking behind this transaction? How did you and your teams decide it was the right move for you?
InXpress possesses a unique business model, strong customer value proposition, and a high quality management team. The business operates at the intersection of a number of emerging secular trends that will power growth for decades to come, including ecommerce. We felt the company was at a unique inflection point in its growth trajectory. HHC felt that we could assist the team in building out more products and services, to even better serve 20,000 customers around the world.
Did COVID present any challenges for you?
The pandemic presented a unique challenge for us during the diligence process, in that we needed to conduct nearly all interactions with the team and our advisers through video and phone conferences. The remote nature of this execution process presented some benefits, but also made the casual interactions that develop over the course of a transaction much more difficult. That said, we ended up efficiently executing the transaction and developing a strong bond with the team through the process. There are certainly some benefits to the adoption of remote working technology that we’ll continue once life finally returns to normal.
How did you work through the challenges?
We relied pretty heavily on the video conference technologies that are now pervasive – FaceTime, Teams, WebEx, and Zoom. We actually found that a number of the calls, discussions and meetings that would have occurred over the phone, were now happening face-to-face over video conference. We found this to be a better process actually – something we’d like to continue once life returns to normal.
From the above, what risk assessment did you undergo to ensure this was the right move for you and your company?
From a purely analytical perspective, in terms of evaluating the business and opportunity, nothing changed about our process. We subjected the team and its advisers to rigorous diligence – which honestly was probably more intense given the lack of business travel, commuting times, etc. The only piece that was missing through the process was the casual interactions with the team – dinners, lunches, travelling together, etc. – that would have normally occurred in any transaction. HHC was much more conscious about creating time and space through video conferences – both as a group and individuals – with the team to develop the bond. Of course, it helped that we had met in person before the transaction started (pre-pandemic).
What are your tips on closing a deal during this unprecedented time?
I would rely on video conferencing tools considerably. At the same time, I do think meeting in person is essential. At some point during the process, it will be important for the management team and investors to meet in person and spend time together – developing a bond before the transaction closes.
What’s next? What are you looking towards in 2021?
We intend to hit the ground running with InXpress – growing significantly off the 2020 records already set. At the same time, we’ll remain opportunistic regarding other investments that may arise.
