Inflation and uncertainty encourage business operations in Alicante

Inflation and uncertainty encourage business operations in Alicante

With just a few days of difference it has been known that three major companies of the province have changed or are about to change hands. If last Monday the purchase of Jury Coffee by the Pascual Group, this Thursday it was made public that two French multinationals, Peek a Boo and Edilians, finalize the acquisition of the manufacturer of childcare products suavinex and the tile producer the escandella, respectively.

And they are just the latest in an ever-longer list. Thus, this same month the Castellón firm of cardboard containers and packaging Grupo La Plana announced the purchase of the crevillentina Soler Containers and shortly after it was the Magnum Capital fund that sold the Miranza group – the owner of the ophthalmological clinic vissum– to the German Veonet.

Last June, this same fund sold its stake in the telecommunications company Grupo Aire to the French fund Ardian Buyout, while the García family transferred ownership of the pest control firm Lokímica to the multinational Rentokil. In addition, the turroneras from Jijonenca Sanchís Mira and Turrones Picó joined forces to obtain Chocolates Clavileñofrom La Vila.

Although the casuistry is very varied and includes, for example, the lack of generational change In some of these cases -such as those of La Escadella or Café Jurado-, the experts consulted agree that the economic situationwith some costs and one inflation shot, and one uncertainty ever-increasing is behind this proliferation of operations.

“There is a lot of liquidity in the markets and, with the current levels of inflation, the funds have the order to move the money, they cannot leave it still without investing,” says the CEO of the Alicante firm Devesa & Calvo, David Devesa, one of the most active in the mergers and acquisitions market in the province. In this way, in some cases the need to divest from some of these large financial firms -after having completed their cycle in the company’s shareholding- is combined with the need to seek a destination for their resources by others.

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bad prospects

The poor economic outlook also plays a role. “We find some funds that have already achieved their profitability objective or with older ownersin the case of family businesses, which see what is coming and they prefer to sell now that they can still do it at a price that they consider appropriate,” says the partner of the firm Livingston Partners, Neil Collen.

In this sense, Collen acknowledges that in the sector it was expected that the deterioration of the situation would cause a drop in operations, but at the moment it seems that the opposite scenario is taking place. “In the sectors most affected by the rise in energy, some operations are being stopped, but in the rest, investors are looking at the ability to generate profit that these companies will have once the situation normalizes or is assumed,” says Collen.

This rise in costs also encourages many companies to want gain size to face the situation in better conditions, which is reflected in the fact that many of the buyers are industrial companies and the same sector, as it happens with Suavinex, Café Jurado or La Escandella, as David Devesa points out. “You should not always think that you are looking for a cost cut when talking about synergies. On many occasions, the benefit can come from a sales improvementfor example, if the buyer includes the products of the acquired company in their distribution channels, which reach more points,” says Collen.

The factory of La Escandella, in Agost. David Revenge

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Without alternatives

Another factor is found in the lack of alternatives to invest what is in the financial marketswhich leads to looking at the real economy in search of profitability that is not achieved in other ways, as explained by the managing partner of Gesem Consultoría, Laura Vincent. A trend that, in the case of individuals, translates into greater investment in the real estateand in the case of companies at entry into businesses that you see possibilities.

On the other hand, in recent years there has also been a certain mentality change, accelerated by the impact of the pandemic, in the opinion of the CEO of Devesa & Calvo. “Before it seemed like a taboo for a businessman to sell the company, which was considered the job of a lifetime, but the new generations are more open and see it as an opportunity to invest in other areas”, explains the lawyer.

From the perspective of the Family Business Association of the Province of Alicante (Aefa), its president, Maite Antonconsiders it positive that these operations will allow the affected companies to continue, but also regrets that their sale will mean that the decision center moves away from the province and the roots that characterize family firms will be lost. “From the association we work so that, if the new generations do not want to participate in the management, at least stay on the property as shareholders, because this proximity to the territory is important,” says Antón, who also insists on the need to eliminate obstacles at the time of handover, such as the Inheritance Tax.

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In any case, this week’s operations They won’t be the last safely. From Devesa & Calvo they point out that they are working on at least five other investments – although that does not mean that all of them end up materializing – and from Livingstone they have at least another couple. And those are just two examples.

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