Following two deals in Italy - Poligof in 2020 and Farmol in 2021 - and a long track record of investing in add-ons for portfolio companies in more than 25 countries around the world, Portobello has made its first direct investment in Germany.
From the minority fund Portobello Structured Partnerships Fund I, Portobello has acquired 27% of an industrial holding company dedicated to acquiring and developing B2B and high value-added industrial companies within the German Mittelstand. The holding company acquires stable, cash generative, proprietary technology businesses at attractive valuations, while maintaining a conservative level of debt, and reinvests the cash flows generated by the acquired companies in new acquisitions for further growth. Portobello's investment has been made through a capital increase that will finance new acquisitions and enhance the growth of the business in the coming years. Germany has more than 190,000 leading, high value-added, small-sized companies.
The business model of the invested holding company is inspired by the concept of the so-called compounders. This model, common in northern European countries (Sweden, Norway, Denmark and the United Kingdom), is based on the successful companies LIFCO, Addtech and Indutrade. The compounders have attractive valuations in the stock markets, due to their high ROIC and ROE and their track record of consistent long-term organic and inorganic growth.
Portobello will bring its experience in the industrial sector and in the acquisition of companies, supporting its partners and the rest of the management team, who will continue to lead the business, in the achievement of an ambitious business plan that includes continuing to acquire and integrate companies in the German Mittelstand.
This is the fifth investment of Portobello Structured Partnerships Fund I, following AGQ Labs, Condis Supermercats, Torre Oria and the recent investment in Eurocebollas, demonstrating the high demand in the market for minority and/or structured capital. The high degree of flexibility of Portobello Structured Partnerships Fund I is highly valued by families, management teams and entrepreneurs who wish to diversify their assets and/or grow their business with the support of a reference institutional partner and without renouncing to keep the majority of the capital.
About Portobello Capital:
Founded in 2010, Portobello Capital is one of the leading independent middle market private equity managers based in Spain with a focus on Southern Europe. It has over €2 billion of assets under management, an experienced team of over forty professionals and a current portfolio of 22 investee companies.
Advisors: Portobello Capital has been advised on the transaction by EY and Baker McKenzie.
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