Spanish rivals merge and plan fundraising

N+1 and Mercapital, two of the Spanish private equity industry’s most venerable firms, have merged to create a new manager that will hit the fundraising trail next year.

If you can’t beat them, join them. Two of Spain’s longest-standing buyout firms, N+1 and Mercapital, have decided that the future looks brighter together.

The new group, called N+1 Mercapital, will launch a fundraising next year once the merger has completed, the pair said in a statement. It will manage funds worth a combined €1.7 billion. The firms claim that will make them the largest private equity group in Spain.

Considering the recovery of the Spanish economy will be driven mainly from abroad, the role of the private equity  industry today is to help SMEs to expand internationally.

Javier Loizaga, Mercapital

The firms explained the merger was agreed “to reinforce their international expansion”. Santiago Eguidazu, chairman of N+1, said: “With this transaction, N+1 is reinforcing its international growth expansion, adding Lat-Am to its pan-European platform and incorporating an excellent group of professionals under its overreaching strategy of becoming the benchmark financial group to Europe and Latin America’s medium-sized corporates, institutional investors and family groups.”

The two firms have together invested €2.4 billion in 107 companies over the past 27 years. Currently, they manage a combined portfolio of 26 companies with aggregate turnover of €3.8 billion.

The new firm will be led by current Mercapital chairman Javier Loizaga, who will become chief executive of N+1 Mercapital. He will also co-chair the new entity alongside N+1’s Jorge Mataix.

The merger gives N+1 access to Mercapital’s significant presence in Latin America: it has offices in Sao Paulo and Miami, with a further two planned in Mexico and Bogota. N+1 has offices in the UK, France, Italy, Germany Luxembourg and Turkey. The combined firm will have a team of 29 investment professionals, the pair said.

These are two companies with very similar cultures, which have followed parallel paths.

Jorge Mataix, N+1

Loizaga noted: “Considering the recovery of the Spanish economy will be driven mainly from abroad, the role of the private equity industry today is to help SMEs to expand internationally, in the same way that during the last two decades it was to support their professionalisation. We cannot wait passively for such recovery to occur, but must work actively to accelerate its arrival.”

Mataix added: “These are two companies with very similar cultures, which have followed parallel paths: they created the Spanish private equity market in the 90s, were pioneers in attracting large institutional investors specialised in private equity, operate in the middle market and in recent years have turned their strategy to focus on companies with significant international stories.”