The ‘search fund’ Arcadio Investments facilitates the generational replacement of SMEs.

(Translation of the article of elEconomista newspaper)

The search fund ecosystem continues to grow in Spain with an increasing acceptance of this entrepreneurial model through the acquisition of a single company. Arcadio Investments was created with the purpose of facilitating the generational handover to a businessman who wants to preserve his legacy and essence of his company. To this end, the new firm led by entrepreneur Jacobo Vera is actively seeking a unique partnership with the founder of a small and medium-sized enterprise (SME) to actively manage it and grow the business over the long term.

Under this investment proposal, Arcadio Investments looks for companies in sectors with growth prospects, sustainable returns, low exposure to external factors (regulation and economic cycle), with a niche or high added value product/ service and a stable and diversified client portfolio. Specifically, Arcadio Investments focuses on businesses between 5 and 20 million euros with a track record of growth and stable revenues.

The search fund takes an active role in the company in which it invests. “We join the management team full time and travel to their headquarters to manage the day-to-day operations. Unlike traditional private equity, we dedicate 100% of our time, energy and capital to the continued success and growth of the one company acquired” explains Vera.

Investment Base

Arcadio Investments is backed by more than 20 partners, institutional and individual investors, both national and international, with an outstanding experience as businessmen, investors, and entrepreneurs. As partners in the project, they will assist the searcher in the investment decision-making, through Arcadio’s investment committee, and subsequently in they will support the Jacobo in the operational management of the company, through the board of directors.

Among the investors that have supported Arcadio Investments, Arada Capital Partners has supported Jacobo Vera since the very beginning. Arada Capital Partners invests in search funds globally. Combining the traditional private equity model with aspects of entrepreneurship, Arada Capital invests through an innovative collaborative model of “entrepreneurial acquisitions”, capable of generating superior returns for investors and entrepreneurs.

Arada Capital Partners, based in Madrid, invest and advises search funds and similar vehicles. Through the “search funds” it takes minority but relevant stakes in small and medium-sized companies. In addition to investing, Arada Capital Partners also actively supports search funds in the search for their companies, in the subsequent acquisition and value creation process – once acquired – and in the final exit (final divestment).

Growing ecosystem

Javier Puig, international investor in the ecosystem and advisor at Arada Capital Partners, explains that Spain is one of the main players in the search fund ecosystem thanks to the multiple factors driving the proliferation of this type of investment vehicle. “The typical target of search funds are SMEs with an ebitda between 1 and 3 million euros. Companies with a track record of profitability and growth, which, due to succession issues or other reasons, their owners want to sell. This type of operation is viewed favorably by banks when it comes to financing the acquisition and their new strategic plan, as they are proven and solvent businesses with a good financial structure”, he explains. In his opinion, after the baby-boomer generation, a simple demographic reasoning makes it obvious that the opportunities for companies/SMEs to be acquired are very high. “Although there are many search funds in Spain, competition is still limited and much lower than in segments of the market where acquisitions are larger”, he concludes.

Arada’s latest investments also include Signatus Capital, the search fund led by Spanish entrepreneur Enrique Sales. Last December Enrique’ acquired IESMAT, the Spanish leader in applied technology solutions. With the operation, the industrial engineer has assumed the functions of CEO of the group and acquired a significant stake in the company together with other private investors, with the aim of promoting a new phase of growth.

IESMAT: Arada Capital Partners first acquisition

We are excited to announce the first acquisition of Arada Capital Partners. Thanks to the incredible work done by Enrique Sales and his Search Fund team at Signatus Capital, we have been able to acquire an incredible company with a great growth potential: IESMAT.

From Arada Capital Partners, we are very proud to be partners of our new CEO Enrique and excited for this next phase of our journey together.

With more than 15 years in the sector, IESMAT supplies, installs and gives support in the world of scientific instrumentation. IESMAT distributes in Spain products with exclusivity from some of the main brands and producers within the scientific instrumentation sector.

Arada Capital Partners | Support, guide, mentor and invest in Search Funds

Arada Capital Partners invests through Search funds in solid and profitable companies with a history of growth, with the aim of implementing a strategic plan and looking for an exit after a few years.

We invest with the objective of getting involved and add value in everything that is necessary for the Search Funds. Our goal is to have a limited number of exceled Search Funds in our portfolio, allowing us to provide the maximum added value to each of them in a personalized way, and therefore acquire great businesses with even greater management.

We support, guide, mentor and invest in Search Funds

Bring maximum value to both our Search Funds and Investors

We want to add value to the Search Funds. We invest willing to help and support during all stages and for this we make available to the Search Funds in which we invest a wide variety of resources:

  • During the search of opportunities, Arada Capital Partners aims to help entrepreneurs in the search by providing the necessary tools, contacts and framework to maximize their potential.
  • Arada Capital Partners, with its M&A expertise, strongly helps Search Funds during both the acquisition and sell process. We help with the structuring of the bilateral or competitive process, preparing a valuation model, due diligence organization, VDR preparation, site visits organization, preparation of management presentations, preparation of legal documents, and in any other tasks that the Searchers might need help with.
  • Arada Capital Partners provides to the new management, through its multidisciplinary management and advisory team, support, guidance and mentoring to the Searchers and the company acquired.

We invest globally, with a special focus in Europe and the UK

Deal by Deal Analysis: potential investments will be analyzed objectively and in isolation, regardless of which sectors or countries are already active in the Arada Capital Partners portfolio.

The Search Funds in which we invest looks for and acquires solid and profitable companies with a solid growth trajectory. Jointly with the Search Funds, we aim of implement a strategic plan and expand the acquired companies to a next level.

  • The Search Funds seeks to give continuity to the fundamental pillars of the success of the acquired company, building on the founder’s legacy with the help and advice of its investors to materialize the next phase of growth.

In addition, Arada Capital Partners invests in sustainable companies that generate a positive impact on society (oriented towards ESG impact).

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