Details have just emerged about the fate of one of Mercapital’s erstwhile rivals. Independent buyout firm Excel Partners, which was one of the earliest active investors in the Spanish market, was dissolved in acrimonious circumstances in May 2005 and its portfolio was acquired by Coller Capital, a UK-based secondary investor.
Trouble started for the company in September 2004, when there was a major difference of opinion between the two founding partners, David Bendel and Jose Maria Lopez de Letona. The disagreement, which initially revolved around the strategic direction of the firm, became even worse when a third partner, Ramon Menendez de Luarca, was recruited.
At that stage, investors in the group’s third fund became concerned about continuity and the ability of the general partner to manage the portfolio. Initially, the limited partners attempted to solve the problem themselves by dividing the existing portfolio between the two founding partners. That solution did not work and it was at that stage that secondary investors became involved.
Erwin Roex, partner at Coller Capital said: “We got involved in early November last year when we proposed to buy the assets from the fund so that the institutions could get distributions. It was a very complicated situation because we had to deal with 14 sellers, most of which had their own legal representatives.
At the same time, we were acting as peacekeeper between the different factions in the general partnership.”
While these negotiations were still on-going, Bendel span out to set up his own firm – Minerva Partners. Coller successfully agreed to buy the companies and liquidate the fund and then subsequently set up a management contract with Minerva to manage part of the portfolio through to a successful exit.
Roex continued: “We expect to start exiting the portfolio in the next couple of months, and would expect to have sold all the interests within the next 24 months.”
The portfolio comprises Unitronics, a network operator; Rotographik, an offset printing company; The Real Music Group, a music publisher; Gas Gas, a motorcycle manufacturer and Expert Maschinenbau, a supplier of automotive components.
Coller worked with Ashurst on the deal, the GP used SJ Berwin and the vendors had their own lawyers.