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Candover eyes Spanish deals

European buyout specialist Candover is building on its presence in the Spanish market with the appointment of Alejandro von der Pahlen as an advisor to originate deals for the firm in Spain and Portugal. He will work alongside Gerard Conway, who will continue to be based in the London office.

Von der Pahlen has a long-standing track record as a senior corporate financier with international experience. Focusing on Spain and Portugal, he spent over 20 years working at Lehman Brothers, Credit Lyonnais and most recently Andersen Corporate Finance, where he was responsible for developing the Spanish and Portuguese presence of the practice. During this time, he was also involved in advising on several MBO initiatives including Hays DX Spain, where he had advised Hays previously on the acquisition of these units.

Colin Buffin, Candover managing director, said: “Alejandro’s appointment strengthens Candover’s ability to target and transact buyouts in Spain and Portugal. The size and the volume of private equity deals in these markets have grown considerably over the last decade, driven by corporate restructuring and by privately held businesses needing to compete in the broader European market. We expect Alejandro’s network of contacts and transaction expertise will be invaluable in accessing and acquiring targets in these markets.”

But Von der Pahlen is not expecting to be inundated with deals that match Candover’s criteria: “The minimum size transaction for Candover is EURO75 million, which limits the number of transactions in Spain that are attractive to the firm as the average size of MBO transactions there is much smaller. In the first year there were less than ten transactions above the EURO35 million mark.”

There are probably only about five players in Spain looking at transactions in Candover’s range – Carlyle, Apax and CVC Capital Partners are all looking at deals of this size (see next story on Advent International setting up in Madrid.) For this reason Candover’s objectives are quite conservative the firm will try to do one or two transactions in the next couple of years.

Von der Pahlen stresses the Spanish market does have potential for Candover, even if the focus is on deals at the smaller end of the spectrum. In the first six months of the year, he says, there were around 170 transactions, including recapitalisations, but most of these were quite small.

No access to the stock or bond markets and the fact that some Spanish banks have incurred huge losses from investments in Argentina and Brazil has forced them to look for liquidity by divesting of some of their industrial portfolios and non-core activities. This is producing some prime targets for private equity houses, he adds. Candover is hoping to cash in on the opportunities.