Mestral and Encomenda launch €50M fund to take over ageing Spanish SMEs
What's the deal? Mestral VenturesDealroom has a profile for this one. Try Dealroom →, the venture firm founded by Ernest Sánchez, Marc Borrell, and Jared Gil, has teamed up with fund manager EncomendaDealroom has a profile for this one. Try Dealroom → to launch its first fund. The vehicle, Mestral Pymes Catalyst Fund 1.1, has approval from Spain's securities regulator, the Comisión Nacional del Mercado de Valores (CNMV), and targets small and medium-sized enterprises facing succession problems.
The details: The fund has a target size of €50 million, with a hard cap of €60 million. It plans to invest in 10 to 12 companies, deploying between €5 million and €10 million per business, and does not rule out leveraged deals backed by financial institutions.
Why now? "70% of Spain's SMEs will face succession problems within ten years, and many will be sold," says Sánchez, who is also a partner and board member at Encomenda, the firm led by Carlos Blanco and Mercè Tell.
What's the endgame? Mestral will take majority stakes of 60% to 80% while keeping founding families as shareholders. It targets traditional, fragmented, and digitalisable sectors including light and heavy industry, specialised distribution, B2B services, food, consumer goods, logistics, manufacturing, and training.
The plan: After investing, Mestral runs a 100-day plan built on three pillars — digitalisation, management, and internationalisation. The goal is to multiply the ebitda of its holdings, which starts between €800,000 and €3 million.
"We will take majority positions of between 60% and 80% of the capital, but unlike search funds, we keep the family in the shareholding so they can help us with their knowledge and extract more value over the years," Sánchez explains. The fund has a four-year duration from its first close, extendable up to three times in one-year periods.
The signal: The vehicle fits a wave of new funds targeting Spanish SMEs, from MiraltabankDealroom has a profile for this one. Try Dealroom →'s €50 million credit fund to public-private programmes in Andalusia and the CDTIDealroom has a profile for this one. Try Dealroom →'s Innvierte scheme. Modest in size, it reflects the growing role of private managers in financing traditional companies — and a bet on generational handover as a source of deals.
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Image credit: Artem Beliaikin
