Intro - Searcher in Spain

searcher profile

March 29, 2021

by a searcher from INSEAD in Madrid, Spain

Hi all,

My name is Sergio Martinez, have been following this amazing community for a while, and finally my time to carry out a full time search has come.

I'm a self funded searcher, looking in Spain, and would greatly appreciate to connect to fellow searchers.

I had two topics to flag for your thoughts:
1) How effective is cold calling/emailing in the Spanish context? I get the impression that, "culturally", Spanish owners will be less reactive to this method than other markets (e.g. US)...
2) How open have you found Spanish DD providers to contemplating discounts/rollovers for their fees in aborted deals? As a self funded searcher this is a topic that particularly concerns me...

Gracias, and all the best!

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commentor profile
Reply by a searcher
from Miami University of Ohio in Barcelona, Spain
Hi Sergio I'm based in Barcelona. Frankly on the DD question, costs of legal/accounting are so much lower in Spain compared to the United States that I've never found much flexibility. I also think you should be able to get through DD at a relatively low cost in Spain.

Regarding cold calling, I think it can work. Biggest issue I saw in Spain was lack of valuation knowledge/ realism. Even brokers are trying to push crazy valuations. The lower market is mostly driven by emotion on pricing. I've found most owners would rather hire a new CEO for 100K/year and keep the cashflow than sell.
commentor profile
Reply by a searcher
from IESE Business School in Valencia, España
If you dont have to report a pull of investors. You can do the DD using some local advisors taht wont cost you as much as a branded firm. However you have to measure as welll who will do the DD for you because finally you are auditing the company and maybe too cehap is too bad.
On the other hand, you can also negotiate a success rate or, share the invoice with the company that you are going to purchase (as you will be the owner, you will have to know if the company can afford to pay the bills).
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