Gracias al modelo Search Fund, los objetivos y motivaciones del vendedor se maximizan

At Arada Capital Partners, every week we talk to talented entrepreneurs who are preparing to launch or have already launched their Search Fund. They are following an entrepreneurship through acquisition path.

In all these meetings we are fortunate to learn new things that help us to have a much broader vision and to give an additional added value to new Search Funds. With these conversations we enrich our knowledge of the Search Fund ecosystem.

Below we share with you a meeting Javier Puig had last week with Javier Poveda, Managing Director of Almond Capital. In this excerpt from the conversation, Javier reminds us of the importance of alignment with the seller of the company to be acquired. There are many mechanisms that can be used to align the interests of all parties, but as Javier says, it is important to analyse and understand the circumstances surrounding each target company and its owner.

Javier Puig: What are the seller main motivations for selling? What factors should a Search Fund analyse regarding the sellers objectives or needs?

Javier Poveda: Every businessman who wants to sell his company has a different motivation and a different vision of his future. They are the real protagonists of the story and a key point in any Search Fund acquisition.

In the first stage, as in a Maslow pyramid, the seller has different survival factors: securing long-term wealth and ensuring the well-being of their families through diversification. By selling the family business when there is no natural successor, the businessman can diversify the capital obtained from the sale into different sectors or investments, and even keep part of it in the company he created, built up and now sells.

In a second stage, the seller will seek to ensure that the history of the company continues, that his legacy continues and that the company he founded grows while maintaining the pillars he established. With this goal in mind, the seller will seek to leave the company in the hands of a buyer who care for it as he did. Therefore, it will also be very important to organise a structured transition, where empathy between the founder and successor-searcher has a great importance.

The aspiration of a full retirement is not just about the cash outflow, but also includes higher aspects that searchers must analyse and understand to facilitate the acquisition of the company. Alignment with the seller’s objectives is a critical part of the acquisition.

Javier Puig: In this sense, when we talk about aligning objectives with the seller, what can a Search Fund bring on top of the table that a Private Equity or industry competitor cannot?

Javier Poveda: The first stage I was talking about in the previous question can be given by any potential buyer. Economically speaking, the market is efficient in that sense, although extreme offers always have a trick; buyers use them to dazzle the seller with a multiple X and thus rule out other candidates.

I would argue that the key is in the second part: different types of buyers bring different circumstances. For sellers who value the legacy of their company and its history, a Search Fund can be a fantastic acquisition-partner because the focus is always on the company.

The Search Fund can be very flexible in structuring the deal and the alignment of interests is usually maximised. The Searcher, together with its investors, simply takes over to start a second phase of growth of the acquired company, respecting always the culture and foundations established by the founding businessman or seller. That culture and those foundations have proven to work very well for many years, it makes sense that the next phase of growth builds on them.

In the case of an industrial buyer, the key player is the parent company that takes over the company in question. In the case of private equities, the day-to-day involvement of the latter is limited and is often structured through the management committee. In the case of a Search Fund, the searcher becomes the new CEO, ensuring that he will be on the ground on a day-to-day basis, the value contribution is immensely greater.

Javier Puig: Searchers typically looks for companies in very different sectors, they are considered to have a sector agnostic search. How does a searcher prepare for a serious conversation with a seller and demonstrate the necessary industry and business knowledge?

Javier Poveda: I believe in specialisation. I believe that searchers should have sectors of preference based on their backgrounds; there is no research that can replace in-situ experience. In addition to knowledge, when two professionals from the sector sit down to talk, people in common from the industry that both employer and searcher know come out to the conversation, stories from the industry, etc. All this generates empathy in both directions that is very positive for the future negotiations and alignments of interests.

Javier Puig: How do you gain the trust of the seller to make him believe that you will be capable of managing his company in the future? How will you win over the company’s staff when the time comes?

Javier Poveda: I believe that being both 100% authentic and competent are key factors.

Authenticity is very important because in the end what this type of sellers are looking for, is a successor who shares the same way of seeing the world and who works with the same values.

The Search Fund’s competence and knowledge of the sector generates confidence in the businessman who is selling, as the baton is passed on to someone who knows the business and shares the same passion for the product/service. The same goes for former employees of the company, they will be looking for a competent decision-maker from the very first day.

Javier Puig: How do you know if a seller is really motivated to sell?

Javier Poveda: The enemy of the sellers is the lack of time. Time to visualise their future and time to find the right successor. Often, there are sellers who have started to think about a potential sale of their company but have not yet matured it. In these cases, when there is real excitement and the potential sellers starts seeking for a vision of not only his future, but also the future growth of his company, then I believe that it is a good moment to start a serious conversation with them.

At the other extreme, if the seller is very proactive in selling but all they focus in is a price or valuation of their company, for us it is a clear sign that they have no interest in the future of their company. Without this interest, the alignment and structuring of the management handover will be very difficult.

Javier Puig: When you identify a good target company and a seller who is willing to sell, how do you think is the best way to structure the buying process?

Javier Poveda: I think it is a shared effort: «let’s do it together». It is good to have visibility of all the different steps involved in a typical transaction and to approach it together. In case they are not familiar with it, you must explain to them what phases and milestones are involved in an M&A transaction like this.

It is also very important to talk openly about the concerns of both parties, and to help each other mitigate those risks or concerns as quickly as possible.

Javier Puig: How do you coordinate the opportunity with your search fund investors?

Javier Poveda: Each investor brings a different value to Almond Capital. Having fluid communication and knowing who to call and when to call, is important to optimise each investor’s time.

In my case, since I started the search period, everyone is up to date on how the process is progressing and everyone has their doubts or opinions that help me to reflect on things I hadn’t realised, or that help me to better structure the details of the operation.

Javier Puig: Once a Searcher acquires the company, what role does the former owner have to play in this second phase of the company’s growth? What degree of involvement will the founder or former owner of the company maintain in the future?

Javier Poveda: I believe in structured and carefully planned transitions. Entering a company and trying to start many plans/ actions from day one is a guarantee of failure. I like to see owners taking care of the transition process, accompanying the successor/ Searcher and gradually stepping back. It takes time for the successor to be able to fully replace the founder.

I look for structures where both parties are comfortable, structures where parties also complement each other and walk together through the transition. That is why I believe that empathy between the seller and successor is key. If this does not happen, there will be serious problems.

This model is about people, and therefore not just any Search Fund is the right partner for the company in question, and vice versa.

Nace el «fondo de busqueda» Arcadio Investments para facilitar el relevo generacional de las pymes

Búsqueda de buenas inversiones: El análisis del sector

Es cierto que un buen negocio es un buen negocio, pero algunos sectores potenciarán la creación de valor de una empresa y, por tanto, se convertirán en una mejor inversión.

Revisar la industria o el sector debe ser el primer paso para analizar las diferentes alternativas de inversión. Los sectores afectarán positiva o negativamente a nuestra inversión en el futuro y también jugarán un papel muy relevante para los accionistas.

Arada Capital Partners busca una serie de características en los sectores en los que invierte, destacamos las siguientes:


Invertir en el momento adecuado: el crecimiento del sector y la fase de madurez de la industria

Las empresas son como los veleros, es importante tener viento a favor si se quiere avanzar rápidamente. El crecimiento histórico y previsto del sector es uno de los factores clave que hay que analizar. Todas las industrias evolucionan a través de las siguientes etapas:

1.               Introducción: industrias nuevas y en desarrollo. Aunque la competencia puede ser limitada, normalmente tarda un tiempo en establecerse.

Esta primera etapa no es la que buscamos en Arada Capital Partners, los rendimientos pueden dispararse, pero las empresas suelen ser pequeñas y tienen
más probabilidades de fracasar.

2.               Crecimiento: la industria/empresa ha demostrado su viabilidad y comienza la etapa de expansión. En esta etapa, muchas empresas nuevas entrarán en la industria y los productos/servicios mejorarán.

No es fácil diferenciar cuándo comienza esta etapa, pero los inversores obtienen una gran recompensa con un bajo riesgo, ya que la demanda supera a la 

3.               Madurez: el rápido crecimiento se desvanecerá en esta etapa, dando paso a un periodo de crecimiento más lento y de estabilización. Aunque las ventas sigan creciendo, lo harán a un ritmo mucho más lento que antes. Los productos ya no serán tan innovadores sino más bien estandarizados y la competencia será alta porque habrá muchos competidores que fueron atraídos en la fase de crecimiento. 

Esta no tiene por qué ser una mala etapa para adquirir una empresa, ni mucho 
menos, son negocios probados en los que la viabilidad del negocio está más que demostrada. Simplemente habrá que tener en cuenta otras características del sector que aseguren que la inversión merece la pena: competencia limitada, barreras de entrada, ciclicidad…

4.               Declive: esta etapa puede estar provocada por multitud de variables: cambios en el sector o la industria, pérdida de interés por un producto, etc.

A veces conviene cuestionar los sectores que se enfrentan a estas etapas de 
declive: ¿era inevitable el declive o la dirección de las empresas podría haber tomado algunas decisiones que podrían haber cambiado el resultado?


¡Cuidado! Los sectores cíclicos y estacionales pueden ser demasiado peligrosos para el modelo Search Fund

Invertimos en empresas en las que el management se convertirá en el principal accionista y formará parte del comité consultivo, garantizando la alineación entre todos los accionistas y empleados. Pero siempre debemos recordar que habrá una nueva dirección y, por lo tanto, todos buscamos minimizar los riesgos.


Las empresas no cíclicas serán normalmente más fáciles de gestionar, ya que los retos que aparecerán tendrán una menor o nula exposición a los ciclos económicos.

Del mismo modo, la estacionalidad podría suponer un riesgo excesivo en la ecuación. Los negocios estacionales aumentarán el riesgo de la empresa y afectarán a las decisiones de gestión.


¿Hasta aquí todo bien? Empecemos a analizar el sector más de cerca: El modelo de las cinco fuerzas de Porter

Siempre debemos revisar y cuestionar la industria a través del Modelo de las Cinco Fuerzas de Porter, y añadir una sexta variable: el poder de los proveedores de bienes y servicios complementarios.

1.     Competencia en la industria: hay que analizar muchas variables para comprender mejor la intensidad de la rivalidad dentro de una industria. Tenga en cuenta que algunas variables pueden ser comunes entre varias fuerzas del modelo:

 – Concentración de los rivales

 – Homogeneidad del producto

 – Fidelidad a la marca

 – Exceso de capacidad de producción

 – Costes de cambio del consumidor

 – Efecto de red

2.     Barreras de entrada: principales factores a analizar:

 – Costes fijos elevados

 – Economías de escala

 – Efectos de red

 – Regulación gubernamental

 – Habilidades o equipos especializados necesarios

3.     Poder de negociación de los clientes: este poder de negociación aumentará cuando los clientes sean más grandes o estén más concentrados y tengan buena información

 – Concentración de clientes

 – Información y coordinación de los clientes

4.     Poder de negociación de los proveedores: este poder de negociación aumentará cuando los proveedores sean más grandes o estén más concentrados y tengan buena información

 – Concentración de proveedores

 – Información y coordinación de los proveedores

5.     Amenaza de bienes/servicios sustitutivos: 
  – Bajos costes de cambio.

 – Diferencias de precios de los sustitutos

 – Diferencias de atributos de los sustitutos

6.     Poder de los proveedores de bienes/servicios complementarios: Los bienes o servicios complementarios pueden añadir valor a los productos existentes en una industria. Sin embargo, cuando los complementos tienen características poco atractivas o no aportan ningún valor a los consumidores, pueden convertirse en un problema para la industria al frenar el crecimiento y limitar la rentabilidad.

Javier Puig