Xafinity was acquired for £115m in July 2005 and is a good example of Duke Street’s approach to post-investment transformation. The high number of medium-sized players in this sector made a Buy and Build strategy an attractive proposition. But a stable position in an attractive sector was not enough. Xafinity needed material change if it was to reach its full potential and attract a full price at exit. We started looking at the pensions and benefits market in early 2004 and identified an increasing demand for high-quality specialist services. When Xafinity was initially put up for sale in late 2004, it went through a difficult auction process and failed to attract significant interest from strategic buyers. Our knowledge of the market meant we were in a prime position to acquire the company. Xafinity, formerly Hogg Robinson’s Benefit and Consultancy Services division, is made up of three businesses: Xafinity Consulting is a pensions consultancy business; Xafinity Paymaster has a strong position in private and public sector outsourcing; and Xafinity Claybrook is the market-leading provider of pension administration software. The businesses offered a sound base from which to capitalise on the opportunities offered by the pensions and benefits market. Ongoing pension deficits, the proposed National Pensions Savings Scheme and regulatory and legislative changes all pointed to strong growth potential in this sector. To steer the transformation, we appointed a new CEO, Tim Robinson, and Alasdair Marnoch as FD. Tim was formerly MD of the Security Division and a member of the Thales Group’s Executive Board. Alasdair was previously FD of Jarvis plc and Dunlop Slazenger Group. We appointed Richard Stephenson as Chairman, one of the DS Operating Partners. We also recruited Sir Nicholas Montagu, an industry expert as NXD. Sir Nicholas was the last Chairman of Inland Revenue and prior to that had held a number of other senior positions in the Civil Service under both Labour and Conservative Governments. We worked closely with the senior team to strengthen management, develop and support an acquisition strategy and make the business more attractive to potential buyers. Having been run as three separate businesses in its former parent company, there were opportunities to make operational improvements at Xafinity. We also capitalised on other opportunities, including better cross-selling between the three businesses, a more aggressive approach to acquiring new customers, and service improvements. To support our ambitious growth plans we increased the level of capital investment across the Group substantially. Efficient cash management, a property sale and lease back and the successful sale of the Remedi healthcare business in December 2006 led to an early repayment of bank debt and loan stock. By off-shoring selected processing operations we were also able to reduce the company’s cost base and enhance its competitive offering. In April 2008, we supported Xafinity’s acquisition of a key competitor, Hazell Carr. The acquisition provided Xafinity with a complementary set of business activities, combining areas of focus which integrated well into Xafinity and additional activities (such as complaints handling) which extended the Group’s service offering. The acquisition also established the company as a consolidator within its industry. We sold Xafinity to Advent International in February 2010.