M&A Corporate operations

Investing in Spain is fashionable for venture capital

Investing in Spain is fashionable for venture capital

That Spain is in fashion is no secret.

Spain is a large and internationalized economy with a favorable business climate, coupled with an attractive tax system and a workforce that is cheaper than the European average and highly qualified. In addition, investors greatly value the progress derived from macroeconomic reforms and the improvement of international competitiveness where exports have shown a magnificent evolution in recent years.

This increased confidence in the economic stability of Spain, together with the large offer of varied assets at attractive prices Due to the deleveraging of banks and companies, it has caused a multitude of investors of different profiles to think of Spain as a priority destination for their investments.

In addition, due to the funding restriction and the lack of liquidity of Spanish companies, the foreign investors coming from more dynamic markets, they have the ability to acquire companies at a good price and with room for growth.

Opportunistic funds (also called vultures), institutional investors and the more traditional private equity are analyzing corporate operations in Spain. Everyone knows: it is time to invest.

Regardless of the upheavals in the real estate and financial sectors, private equity funds are analyzing acquisition and / or debt capitalization operations in companies that have a good market position, but they need a strategic and financial refocusing to turn their EBITDA to positive.

When a company is in bankruptcy, the purchase of a business unit is a very frequent option that allows selecting the specific assets that the investor wishes to acquire and reducing their price considerably.

But it is not only distressed companies and assets that are being the subject of corporate operations. There are more and more investment opportunities in good companies, having a those with a presence outside of Spain or an active internationalization strategy are especially attractive. In these cases, the entry motivation is not an attractive price, but the possibility of creating value in these companies.

Venture capital funds continue to bet on companies with high sales, growth potential, identified problems or unprofessionalized management. Usually, Companies that have a technology or product that represents an entry barrier for other competitors and an international geographic positioning are interestingImage credit: insidetradellc.com, familyofficegroup.com

Post author

Jorge Hernandez He has a degree in Economics.
Assistant to the Finance and Corporate Development Department as Head of Financial Planning and Reporting in the Digitex Group.


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