Interview with our Spanish Partner about a major deal
Interview with Jordi Blasco from Ars Corporate on the closing of a major deal selling Doga to a Spanish Private Equity group Nazca
Can you tell us how this deal came to be?
The story for this deal started about 4 years ago. We were approached by Doga a number of years ago to sell a different division of their company. After some research, we had a difficult meeting where we explained to them that we didn’t think this would be successful and didn’t want to take a retainer fee from them for something we didn’t feel at the time we could achieve. Although a retainer fee is attractive, we explained to them that we don’t work for the retainer fee, we work for the success fee.
We fast forward 2 and a half years to 2022 and afterwards realising that we must have made an impact on their management team, we were contacted again by them to sell the rest of the group (much bigger than the division they wanted to divest first).
We realised that this deal had a great potential and agreed to act on their behalf, so we began searching for a suitable entity and faced challenges along the way. We came up with a list of about 120+ potential targets and then began the process of fine tuning and finding the right fit. We shortened this list to 18 or 19 potential buyers and began the process of getting signed NDA’s and shared the CIM (Confidential Information Memorandum) with the selected potential acquirers. An informal auction began among these potential targets, and we started to reach some high numbers. We ended up with 5 and then 2 serious offers, one from a Spanish private equity group and another from another group brought to us by another MAWW member. We were under a lot of pressure to complete the deal as the valuation had hit the magic number wanted by the owners.
Ultimately the Spanish private equity group made the same offer in financial terms, but with some details that reduced the risk for the sellers and so the shareholders opted for this option.
It ended up being one of the 10 biggest deals in Spain in 2022.
What was the biggest challenge in closing this deal?
The biggest challenge for us were the sky-rocketing costs of the energy, the rising financial costs for the buyers and the War in Ukraine. Due to the uncertainty in the markets, we had to postpone for one month and a half the closing, and renegotiate some important terms, although not the price, in order to make it possible.
Just as the deal was being completed, literally one week before signing, we had one final issue: although we managed to keep the deal confidential, there was a press leak and sensitive information including the deal value was leaked by a reputable Spanish Financial newspaper. It could have ended the deal and left everybody very nervous. Ultimately as we had such a good relationship with Nazca and Doga, we overcame this final hurdle and closed the deal within a couple of weeks
What was your biggest learning point from this deal?
To be honest, patience and honesty was the biggest lessons we learnt, although they are not new ideas. We found that you have to be aware of the needs of the client in terms of timing and manage their expectations along the way.
How do you think this deal can lead to others in the future?
The deal had a lot of impact in the financial news in Spain and this deal has given us some industry expertise in the automotive and metal parts sector which will lead to companies coming to us.
More information about ARS Corporate.