Germany’s Mittelstand is entering a generational handover. Hundreds of thousands of small and mid-sized companies will face a succession decision in the coming years as a generation of founders and owners reaches retirement. Many of these businesses are profitable, well-run, and central to their regions and industries – yet a significant share will close simply because no suitable successor steps in. The result is lost jobs, lost expertise, and lost capacity in what has long been the backbone of the European economy.

trolega was founded to be part of the answer. The mission is direct: acquire one outstanding German Mittelstand company through succession, take operational responsibility, and lead it into its next chapter – preserving what the owner has built while developing it for the long term.

Behind trolega is Tobias Röhrl, a German operator and entrepreneur with more than a decade of experience working alongside founders and owners. His background combines entrepreneurial execution with operational leadership: founding and exiting his own eCommerce brand, holding senior operating roles in scaling companies, and advising family-owned businesses as a fractional COO – including a 100-year-old family-owned company going through internal succession. Having lived succession from inside a multi-generational business, Tobias is a bridge builder between tradition and innovation.

trolega is backed by a selective and diverse group of investors, including Alza Capital, OnetoOne Asset Management, Linta Partners, LeFonds Capital, EPA Investissements, Cabiedes Capital, along with several family offices, former German searchers, and private investors.

The search focus is on established, owner-managed B2B companies in the DACH region with strong management teams, loyal customer relationships, and a proven track record of profitability. The target profile includes businesses generating €5–30M in revenue and €1–5M in EBITDA, typically employing between 30 and 150 people, with a preference for recurring or highly recurring revenue. trolega is sector-agnostic and focused on resilient business models with a genuine succession opportunity – where the owner is looking for a successor to preserve and build on the company’s legacy. 

Now that the first four months of the year have concluded, we believe it is a good time to review the first SF acquisitions completed at the beginning of 2026. As always, these figures are preliminary — we know that we may have missed some transactions (particularly in the United States), and we also expect to include several currently undisclosed deals in the coming months due to confidentiality constraints.

At the same point last year, we had recorded only 20 completed deals. This year, we are likely to surpass 30 transactions (28 are listed below, but as mentioned, we expect to identify additional deals that may have been missed). This clearly demonstrates the growing level of activity in the SF landscape and suggests another very promising outlook for 2026. We should comfortably exceed 100 completed deals this year, setting a new all-time record.

Countries

Although we may still be missing a few American transactions, Europe has undoubtedly taken the lead, accounting for 17 new transactions recorded during this first four-month period. Once again, the region’s activity was driven primarily by Spain, which saw 8 acquisitions — nearly one-third of all transactions completed worldwide during this period. Combined with additional deals in the UK, the Netherlands, France, Italy, and Denmark, Europe represents more than 60% of all transactions completed to date.

The United States recorded 5 acquisitions, Latin America 4, and APAC 2.

Exits

The good news is that exits continue to take place globally, even if fewer were recorded compared to last year, while still maintaining strong performance trends. Notably, the Tethys exit in France is an excellent example of a SF acquisition that successfully leveraged three key value drivers, making it one of the strongest exits in the SF ecosystem worldwide. In addition, MotionVFX was sold to Apple, marking the third SF exit in Poland over the past 12 months, while another successful exit was completed in Brazil, also generating an excellent return.

Sectors

During the first four months of the year, SF activity was particularly strong across the industrial, technology, healthcare, and business services sectors. Industrial and manufacturing-related businesses accounted for a significant share of transactions, including companies specializing in precision machining, electrical components, surface treatment services, fire protection, dry utilities construction, and tyre and wheel manufacturing.

Technology-driven companies also attracted strong investor interest, particularly those focused on operational management software, identity verification and biometrics, security and video surveillance systems, and marketing platforms for real estate investors.

Healthcare and specialized services remained highly active, with acquisitions involving telediagnosis services, medical aesthetics groups, gastroenterology practices, and animal health and nutrition manufacturers.

In addition, the consumer and commercial services sectors saw notable activity, including automotive repair chains, logistics operators, catering services, legal services firms, and premium niche manufacturing businesses.

Search Funds

Across our media platform, we have already covered more than 40 traditional SFs raised during the first months of 2026. Italy has been the most active market, with 8 new SFs launched, followed by Spain, the UK, the United States, Portugal, Brazil, Germany, India, France, the Netherlands, and others.

Activity continues to accelerate, and when considering the success of ETA events worldwide, each attracting between 100 and 600 participants, it is clear that interest in the ETA path is continuing to grow rapidly. In some markets, however, increasing competition may eventually lead to saturation.

Below is the full list of acquisitions completed during the first four months of 2026:

Target	Country	Sector	Search Fund
Autolift Garage Doors Pty Ltd	Australia	Installation of quality garage doors, gates, and automatic vehicle access	Project Mule
Simova	Brazil	Technology: operational management solutions for construction, agriculture…	Iole Capital
Telecardio	Brazil	Telediagnosis Services	Nosara Partners
Valdishopper	Chile	Last mile logistics operator	Cornisa Capital
Quickpoint	Denmark	Workshop chain (repair and maintenance services – automotive)	Old Georgian Ventures
ADR Usinage	France	Precision machining (aluminum processing and surface treatment)	Aveniir (self-funded)
RAK Protect	France	Industrial services provider (surface treatment, corrosion protection, maintenance…)	Sailly Transmission
Minerva (4 companies)	Italy	Flat screen printing sector	Sunrise Capital
Soei Electric	Japan	Manufacture and sale of electrical contacts and electronic components	Atsuji Nakagawa (National Search Fund)
Nubarium	Mexico	Identity validation, biometrics, and KYC company	Trompo Capital
Duwako Precision Engineering	Netherlands	High-tech precision manufacturing (semiconductor, healthcare, defense…)	Heritage Investments
HBI Tyres & Wheels	Netherlands	Producer of tyres and wheels	Wad Capital (Michaël Vandelaer)
4Dreams	Spain	Purchase of gold and silver items, precious stones, and watches	Criluz Capital
Cartondis	Spain	Design and manufacture of corrugated cardboard solutions	Targos Capital
Ciboulette & Domenico	Spain	Premium wedding and events catering services	Ayete Partners
Confidencial until Sept 2026	Spain	Company specialized in risk prevention & safety coordination in the construction sector	CNEO Partners
Escuela Europea de Coaching	Spain	International coaching consultancy and training company	Maruna Capital
Grupo Security	Spain	Security and video surveillance systems	Libertum Capital
Super’s Diana	Spain	Manufacturer of animal health and nutrition products	Rigi Capital
Vega Piel	Spain	Sale of raw hides (leather goods market)	Polsso Capital
3 clinics	UK	Medical aesthetics group	Skingevity
Ives & Co Solicitors	UK	Consumer legal services firm	River Cam Group
Kid Ease Ltd	UK	Nurseries	Norte Partners
Atlantic Medical Group	USA	Medical practice focused on gastroenterology	Island Heritage Partners
Chinook Fire Protection	USA	Full-service fire protection contractor	Stovall Capital
Horizon Underground	USA	Full-service dry utilities construction services provider	NCA (David Kirubi)
Investor Machine (REI Success Partners)	USA	Marketing platform serving professional real estate investors	Wickdale Capital
Omega Moulding	USA	Manufacturer and distributor of custom picture frame mouldings and accessories	NCA (Robert Vero)

After a career combining engineering, consulting, business development, entrepreneurship, and corporate leadership, Carlos Franco Valdivielso is launching Memorable Capital with a clear objective: to acquire and operate a high-quality Spanish SME. Driven by a deep-rooted passion for entrepreneurship and value creation, Carlos’ Memorable Capital is targeting a single company with an initial enterprise value between €5M–30M, ideally a niche B2B manufacturing or services business in Spain with recurring revenues, positive cash flow, low cyclicality, limited customer concentration, and meaningful growth potential under committed hands-on leadership. Memorable Capital is backed by top-tier investors with complementary profiles, including businesspeople, entrepreneurs, and strategic advisors, such as Mayrit Capital Partners, Cabiedes Capital, BEKA Alpha Partners, Celium Capital, Lefonds.Capital, ATIUD, Redondo y Ugena, BOSCH Patrimonia, Alex Tuya, José Antonio Larraz, Javier Martín Chocarro, Carlos Franco himself and others.

Carlos brings 15 years of experience across different industries and roles. He began his career at PricewaterhouseCoopers, and then held project management roles in companies within ACS Group. Firstly, managing complex projects with responsibility for deadlines, costs, and operational KPIs, and later developing new business lines and driving international business development. His entrepreneurial experience came through a company he co-founded and helped scale from €0 to €750,000 in revenue, reaching an EBITDA margin of circa 20% before a successful sale. Prior to Memorable Capital, as Managing Director in Capgemini’s Advisory & Forensic Services division, Carlos led global business development, managed high-level client relationships, and oversaw multidisciplinary teams. This combination of strategic acumen, operational discipline, commercial leadership and hands-on entrepreneurial execution gave him the practical toolkit required to source, acquire, and professionalize a lower middle-market business.

An Executive MBA graduate from IESE Business School and an Industrial Engineer from Universidad Pontificia Comillas (ICAI), Carlos’ motivation for launching Memorable Capital is both professional and personal. After years in the corporate world and having experienced entrepreneurship first-hand, Carlos developed a strong conviction that he wanted to build his career around ownership. This motivation led him to pursue an MBA, where he discovered ETA and the SF model. Over recent months, he has spoken with more than 150 investors, operators, and SF ecosystem participants, testing the thesis, refining the approach, and validating the opportunity. He believes Spanish SMEs represent a compelling opportunity: many are profitable, under-professionalized, and led by owners approaching retirement without a clear succession plan. Through Memorable Capital, Carlos aims to pair that succession need with patient capital, operational rigor, and values of hard work, integrity, humility, and teamwork, ultimately becoming the long-term owner-operator of a business with the potential to grow sustainably while preserving the legacy of its founder.

Stop burning months on mechanical Due Diligence. Here is a proposed 2026 playbook.

By Jose Antonio Díaz Infante, Founder of Matrits
I-Powered Operations for Growth Companies
LinkedIn | Website

To make it easier for you to read this article, we suggest downloading it in PDF Format.

Matrits helps Search Funds, PE teams, and growth companies compress deal timelines by automating document analysis and deals identification using AI—turning weeks of manual work into days.

Search Funds are growing across Europe and North America. Searchers are active, deals are closing. But there’s a problem nobody wants to name: most of you are still analyzing like it’s 2019.

Two interns in Excel. A Searcher grinding through data. Weeks to rule out a company that doesn’t fit your thesis. It’s slow. It’s expensive. And in 2026, that’s not efficiency—that’s a competitive gap widening between you and the person ahead.

The Problem: The Analysis Gap

I talk to Searchers across Europe and North America, and I hear the same three concerns.

First, dead time. Of your 12-month search, 6-7 months vanish into mechanical due diligence. Reading 80-page reports, extracting data, comparing multiples, hunting for inconsistencies. Work a machine does in minutes without fatigue or error.

Second, analysis quality. Two interns without M&A experience don’t see what an experienced Searcher sees. And you can’t be everywhere: reviewing financials, mapping competitive landscape, evaluating EBITDA risks, validating assumptions. The friction is structural.

Third, opportunity cost. While your team wrestles with spreadsheets, the Searchers who automated this are in conversations with four more companies. They’re closing multiple options in the time it takes you to make one decision. Meanwhile, the AI-First Searcher is already at the LOI stage with three other targets. You aren’t just slower; you are becoming invisible to the best deals.

Human judgment still closes deals. Always will. But AI is already eliminating mechanical friction. And if you haven’t seen it by now, you’ll feel it in six months.

The Solution: An AI-First Analysis Stack

This isn’t about replacing your team. It’s about multiplying what they can do.

A 2026 Searcher builds analysis across four layers:

1. Projects: Your Intelligent Data Room

Instead of scattering documents across Drive folders, you build knowledge silos by thesis. “Industrial Services” vs “B2B Health SaaS” vs “Digital Retail Transformation.” Each silo independent, leveraging Claude’s massive context window to connect dots across 100+ documents in seconds, each holding its own context, multiples, and benchmarks.

Claude enters that silo. It reads every report you have, every comparable, every previous deal. You ask, “Which companies in this sector have low ROIC but ascending margins?” and you get an answer in 40 seconds. With context. No hallucinations.

An intern spends three weeks on that question.

2. Artifacts: Real-Time Visual Analysis

An LBO model? A grid comparing 15 competitors? A cash flow projection with three scenarios?

You don’t build it in PowerPoint over six hours. You build it in Claude. Iterative. Change one variable, the model recalculates. Adjust assumptions, see impact instantly.

3. Analysis at Scale: Connecting Dots Across Documents

An 80-page report is the baseline. But if you have five reports, three market studies, two competitive analyses and you’re not connecting dots, you’re late.

Questions like “Are there contradictions between what management says and what the numbers show?” or “Does this EBITDA risk appear in other deals we’ve closed?” demand massive context. Claude holds that context without losing it.

4. Computer Use: AI That Acts

Searching lead directories, updating your CRM, pulling public registry data, validating suppliers against your criteria. AI no longer just analyzes—it acts.

That’s what separates Searchers with infrastructure from those still playing with Chat.

Alignment: Searcher, Investor, AI

Here’s where the system works.

A Searcher running this stack cuts search costs 30-40%. Fewer interns grinding through mechanical work, more of your time on relationships and decisions.

An investor financing Searchers with this setup knows they’ll see deals faster, deeper analysis, fewer due diligence errors. That translates to higher IRR and shorter cycles.

And AI stays in its lane: it kills friction, it amplifies judgment, it doesn’t make decisions.

It’s Already Happening

Searchers across Europe and North America who spent 2-3 weeks on preliminary target analysis six months ago now do it in 3-4 days. Not because they’re smarter. Because they have infrastructure.

One Searcher fed her entire thesis—30 pages of market analysis, 15 comparables, five previous deals—into Projects. Now she asks, “Which of these 12 targets has the same margin profile as our 2023 deal?” and gets the answer in minutes. With sources.

Another automated target searches across five sectors. While other Searchers are still on LinkedIn, he’s got an updated, filtered, validated pipeline in his CRM every week.

Does that not shift the odds of closing?

Are You Still Chatting or Have You Built the Stack?

Human judgment closes deals. Period.

But mechanical friction is dead. The successful Search Fund of 2026 is using AI intelligently. A Searcher still analyzing like it’s 2019 simply cannot compete with someone running a professional AI infrastructure—that’s not an opinion, it’s a speed, cost, and quality delta you can measure in numbers.

If you’re a Searcher or investor serious about 2026, this isn’t optional. It’s the baseline.

Ready to Build Your AI Analysis Infrastructure?

The gap between Searchers running manual analysis and those with Claude infrastructure is real, and it’s widening.

I help Search Funds implement and train their teams on Claude: building intelligent data rooms, automating analysis workflows, integrating AI into your deal process without replacing human judgment.

If you want to compress your search timeline, eliminate mechanical analysis work, and train your team to leverage Claude at every stage—from target screening to LBO modeling to diligence—let’s talk.

→ Schedule a consultation to explore how Claude transforms Search Fund operations.

No hype. Just results.

At the end of 2024, after nearly a decade of collaborating on multiple businesses and projects, Patrick Hulsen, a seasoned entrepreneur with over 20 years of experience in innovative healthcare IT, and Jonah Vauchel, an entrepreneur with a strong background in mechanical engineering, decided to explore the SF model together and launched Aveniir. After a few months pursuing a traditional SF approach, they ultimately chose a self-funded model and began their acquisition search. They have now completed their first transaction with the small buyout of ADR Usinage. The company was acquired at an attractive valuation (estimated at around 3x EBITDA), structured with approximately 20% equity and 80% debt, financed by Bpifrance, Crédit Coopératif, and Société Générale.

ADR Usinage is a precision machining company specializing in high-quality aluminum processing and surface treatment. With over 30 years of experience, it provides advanced manufacturing solutions, including milling, turning, tapping, and fine machining, as well as specialized surface treatments such as anodizing, coating, and polishing. ADR Usinage serves demanding industries including electronics, automotive, hydraulics, and medical technology, producing everything from single prototypes to large-scale production runs. Known for its technical expertise, modern equipment, and rigorous quality standards, the company is positioned as a reliable partner for custom precision components and industrial machining solutions, particularly in the defense and aeronautics sectors. With 14 employees, the company achieved revenue of €2.6M in 2025 and an EBITDA exceeding €750k.

Patrick explained that they apply typical SF investment criteria when evaluating opportunities, such as EBITDA margins above 20% and recurring revenue streams, and view this first acquisition as the initial step in a broader buy-and-build strategy within the sector. They are already working on a second acquisition, which is expected to be completed in the coming months. Over the next five years, their ambition is to consolidate the sector by acquiring around a dozen companies, ultimately building a leading industrial platform in precision mechanics in France, with a particular focus on the defense sector.

The Italian Search Fund Observatory was created to systematically track and analyze the evolution of the SF ecosystem in Italy. Its objective is to provide a structured understanding of the market through original research based on interviews, surveys, and direct data collection.

Now in its second year, the Observatory—developed by the Graduate School of Management at Politecnico di Milano, with support from the Osservatori Digital Innovation initiative and in partnership with Eureka! Venture SGR—updates the first national mapping of Search Funds in Italy.

The study offers a comprehensive overview of the ecosystem as of 2025, examining the development of the market, the characteristics of Italian searchers and investors, and the main trends emerging from completed searches and acquisitions conducted by Italian SFs.

The Italian SF ecosystem experienced significant growth between 2016 and 2025. By the end of 2025, Italy counted 37 mapped SFs, including 20 active searches, 17 completed acquisitions, and 2 exits. The annual increase in activity was the strongest ever recorded, and the acquisition success rate reached 94%, outperforming international benchmarks (79%).

In Italy, fundraising lasts around 3.5 months on average, while the acquisition search phase takes roughly 21 months.

The typical Italian searcher is approximately 34 years old and often comes from consulting, general management, private equity, or investment banking backgrounds. Most searchers hold MBAs (66% of cases), highlighting the central role of business schools in spreading the model. Female participation remains very limited (only 4%).

Investor participation is increasingly international: 57% of capital comes from European investors, 14% from the Americas, only 28% from Italy. Institutional investors provide the largest share of funding (46%), followed by private individuals (32%) and family offices (22%). The average fundraising amount for the search phase is approximately €562,000, and average number of investors is 18.

The acquisition process is highly selective. Searchers contact more than 1,700 companies on average, sign about 5 LOIs before completing one transaction. Preferred targets are profitable SMEs with stable cash flows, growth potential, and low technological or regulatory risk.

Most sellers involved are first or second-generation entrepreneurs between 60 and 80 years old who decide to sell their businesses mainly due to succession challenges. In more than half of the transactions, sellers remain operationally involved in the company after the acquisition to support the handover and preserve business stability. In addition, vendor loans are used in approximately 75% of transactions, reflecting a high level of trust and alignment between buyers and sellers.

The acquired companies generally show strong financial performance, with average revenues around €10M and EBITDA margins around 23-24%. Most transactions are concentrated in Northern Italy.

Post-acquisition, searchers assume CEO roles and focus on operational improvement, growth, digitization, international expansion, organizational modernization, and sometimes pursuing acquisitions. The main challenges involve change management, personnel issues, achieving sustainable growth, and maintaining continuity with former owners.

Overall, the report concludes that SFs represent a promising solution for Italy’s succession challenges among SMEs while simultaneously creating entrepreneurial opportunities for a new generation of managers and investors.

Overall conclusion

The report concludes that SFs are becoming a promising and scalable solution for Italy’s SME economy. They help solve succession problems, inject managerial talent into traditional businesses, and create opportunities for young entrepreneurs to become company owners and CEOs.

Although still at an early stage, the Italian ecosystem is growing rapidly and may become one of the leading SF markets in Europe in the coming years.

Read the full study: https://www.osservatori.net/progetto/italian-search-fund-observatory/

Jorge Oriol launched Rigi Capital in the first half of 2023. After nearly three years of searching, he has successfully acquired Super’s Diana, a company operating in the animal health sector. The transaction was led by Aurica Search Fund (its second acquisition in this sector following its participation in the buyout of Alfavet, a German company specialized in nutraceuticals for pets), with the participation of other investors such as Moonbase Capital, Itaca Capital Partners, ICF (Institut Català de Finances), and Karim Zahran, among others. The enterprise value was approximately €15M, with around 50% senior debt leverage.

Founded more than 30 years ago and headquartered near Barcelona, Super’s Diana develops, manufactures, and markets medicines and supplements for swine, cattle, and poultry livestock, operating in more than 30 countries. In 2024, the company generated €17.6M in sales and EBITDA of €3.1M.

The investment responds to a business succession process resulting from the upcoming retirement of the owner, Francisca Margarit, following a track record marked by growth and profitability.

“Super’s Diana has a very solid business foundation, a team with deep technical expertise, and a very close relationship with its customers. The priority is to ensure continuity of the project and continue developing it with a long-term vision,” Oriol highlighted.

According to Margarit, the company’s owner until now, “after more than 30 years leading Super’s Diana, I approach this new stage with peace of mind, knowing the company is in good hands. Rigi Capital shares the values that have guided the project throughout all these years, and I fully trust they will continue its development and take it to the next level, while maintaining commitment to the team, customers, and our way of doing business.”

The company’s growth plan combines organic growth—boosting exports and strengthening commercial capabilities—with inorganic growth aimed at expanding the product portfolio and enhancing profitability. In this context, Karim Zahran, an executive with extensive experience in the pharmaceutical sector, joins the project not only as an investor, but also as an active board member leading the inorganic growth strategy.

DD: KPMG / Legal (buyer): Barrilero / AVQ / M&A: CS Corporate Advisors / Legal (seller): Cases & Lacambra

Tosium Capital, founded by Davide Liverani, is a SF focused on the acquisition and long-term growth of an outstanding Italian SME operating in fragmented markets. Davide is supported by a network of investors, including Search Capital Partners, GDA Search, Pina Capital, Endurance Search Partners, Linta Partners, Eureka! Venture, Orca Equity Partners, Evolutiq, and Valmaris Private Investors.

Davide began his career as a consultant at McKinsey & Company, working on strategy and industrial operations projects. He later joined Argos Fund, where he served as a Private Equity Senior Associate, focusing on buyout investments. Having grown up in a family business, he brings a firsthand understanding of SME dynamics and entrepreneurial challenges. He holds a degree in Economics from the Sant’Anna School of Advanced Studies in Pisa. Over the course of his career, he has executed multiple transactions across sectors such as tech security, bakery, logistics, and occupational health; contributed to a successful exit in the safety industry; managed portfolio companies through expansion and operational improvements; and led the full sale process of his family’s business.

He is seeking to acquire and operate a company in sectors characterized by stable, non-cyclical demand and fragmented competitive landscapes, where active ownership can drive value creation. His focus is on B2B services or manufacturing businesses with EBITDA between €1-5M, demonstrating consistent margins, strong cash generation, and a diversified, recurring customer base. Preferred sectors include occupational medicine, mandatory corporate training, B2B testing, certification and inspection, sewage services, and fire safety, among others. He aims to structure flexible transactions that allow for the reinvestment of the current owner, ensuring alignment and continuity while supporting the company’s next phase of growth.

To make it easier for you to read this article, we suggest downloading it in PDF format.

What led you to launch Vystra Capital in India, and why did you choose to operate as a two-person team? How did your prior professional experiences shape your decision to focus on acquiring and operating a single company?

India is a country of SMEs, and having spent the better part of our careers working closely with them, at companies like Rivigo and Zetwerk,  we’ve seen firsthand how strong the foundations many of these businesses have built. They are operationally sound, cash-generative, and in our view, genuinely ripe for the next phase of growth with the right experience and mindset behind them. That conviction is really what led us to Vystra.

When we came across the search fund model (through a serendipitous encounter), it resonated immediately. It felt like a natural extension of everything we had been doing: working closely with owner-led businesses, leveraging technology to make them more efficient, and identifying new vectors of growth while keeping the core intact. Instead of building from scratch or chasing the next high-growth theme, we found a path that let us apply our experience directly: find a great business, bring in efficiencies and professionalization, and then continue leveraging our growth toolkit to deliver scaled outcomes. For two operators with our background, it was hard to imagine a more fitting vehicle.

The search fund model is still very new in India (the first SF only emerged in 2024, with the first acquisition completed last year). How challenging was it to convince local investors to back your search, and how did you assemble your international cap-table? What were the most common reservations you encountered about the model or your specific venture?

We actually went the other way around compared to most searchers: we prioritized local capital first, and not just for the money. Domestic investors bring significant value beyond capital, including proprietary deal access, support in deal execution, and introductions to industry-level advisors. Both of us have over 13 years of experience across corporates and startups, so our networks were large enough that raising local capital was relatively straightforward.

International was a different story. Being slightly late to the first wave of Indian search funds meant that many early international investors had already committed their India allocations and wanted to see how those investments played out before writing new checks. We had to identify a relatively fresh pool of capital. We were fortunate to be introduced, through warm connections, to INSETA partners, Lighthaven, Ambit Partners, and Kinderhook Partners, and each of those partnerships came together well. We believe we have one of the stronger and well-diversified international cap tables among Indian search funds today.

The most common reservations we encountered were around entry multiples, buyer appetite at the SME level, and whether India had room for more searchers. Two things helped us build comfort: first, we came in having already spoken with potential sellers and other searchers before approaching international investors; and second, having our India capital committed beforehand gave us meaningful credibility. Our openness to manufacturing, which most searchers tend to avoid, also differentiated our thesis and resonated with investors looking for broader deal optionality.

With more than half a dozen SFs launched in the past 12 months, how do you assess the current opportunity set for SFs in India compared to more established markets such as the US or Europe?

We are barely scratching the surface in India. India has a massive SME base, practically no mid-market private equity presence, and very limited exit options for an entire generation of boomer entrepreneurs who are sizeable but not scaled enough for large PEs. Many of them face genuine succession challenges; their children have either chosen different paths or simply aren’t interested in running the family business. That creates a deep, structural opportunity for search funds.

We are deeply excited about the evolution of the landscape. We anticipate domestic capital beginning to back the search model, and we believe that over the next five years, India could see four to five dedicated funds-of-search-funds emerge to support Indian searchers. That kind of institutional infrastructure would be a step-change moment for the ecosystem here, and would put India on a trajectory to become one of the more active search fund markets globally.

What structural characteristics of the Indian SME landscape make it particularly attractive—or challenging—for SF investing?

On the attractive side, India offers remarkable diversity. Across major sectors; whether manufacturing, services, or technology; we have large, stable industries with a substantial pool of assets to evaluate. That breadth means we are not forced into narrow niches. Beyond diversity, the macro tailwinds are compelling. Strong domestic consumption and continued capex investment create a large and growing home market, while the China plus one dynamic opens up a genuine export opportunity that didn’t exist at this scale a decade ago.

The challenges are real and somewhat unique to India.

• First, not all businesses fully reflect their true worth on the books. Off-balance-sheet practices remain common in the SME segment, which complicates diligence and valuation.
• Second, entry valuations can be expensive. Private business owners in India set their price expectations against how publicly listed businesses trade, and Indian public markets have historically commanded premium multiples. However, that same dynamic creates a meaningful arbitrage: if you acquire well and build toward a public market outcome, the gap between private entry and public exit multiples works strongly in your favour.
• Third, many Indian promoters tend to deprioritize professionalization as the business scales. Finding businesses with genuine management depth, teams that can handle a transition and actually support a scaled-out outcome, is harder than it looks and requires real diligence.

To what extent do regulatory, legal, or ownership complexities in India affect your sourcing and execution process? Which sectors do you currently see as most suitable for SF acquisitions, and how would you define your current investment thesis?

On the regulatory and legal side, we, as well as the first wave of Indian searchers, have done substantial groundwork to understand the compliance and legal framework. That part is largely sorted now, and we expect it to get easier for searchers who come after us.

Ownership complexity is a different matter. India is predominantly a family business ecosystem, and we frequently encounter cap tables with multiple family members, each with their own expectations and asks. Any situation with a messy cap table is a non-starter for us; clean ownership is a hard prerequisite.

On sectors, our thesis is fairly defined.

• We are most excited about light manufacturing, particularly industrial components and auto components; it is a large, stable space with a deep pool of assets and real potential for platform creation.
• We are also very drawn to specialty chemicals and pharma CDMOs, where there is a meaningful structural tailwind owing to China+1 global sentiment.
• And finally, we are looking selectively at niche tech services businesses. Given India’s well-established IT heritage, there is a rich universe of assets here, but our focus is on embedded, specialized players that carry a lower risk of AI disruption.

What are the most important qualitative signals you look for in a founder when evaluating succession readiness? What role, if any, do you expect the former owner to play post-transaction, and how do you structure that relationship and the deal terms (e.g., reinvestment, earn-outs, seller financing) to minimize post-closing friction?

Having evaluated over 150 assets in the past four months, we have built a fairly clear playbook on what works and what doesn’t. The most important signal is intent. Opportunistic sellers, those primarily focused on maximizing valuation, are not the right fit for us. We are looking for true succession cases: founders who have built or inherited a business, navigated the journey from small to medium scale, and are genuinely emotionally invested in its legacy. Those sellers want the right partner, not just the highest bidder. We believe our backgrounds and operating orientation make us a compelling fit for exactly that profile.

Beyond seller intent, we evaluate redundancy deeply. Is there a strong management layer that can operate independently? Are customer relationships derisked from the promoter? Are the company’s finances cleanly separated from the promoter’s personal finances? These are non-negotiables for us.

Regarding the post-closing role, we don’t expect the former owner to be involved in day-to-day operations. What we do expect is a clean, structured transition, covering customer and key supplier relationships, technical knowledge transfer, and anything else requiring continuity. Beyond that, we want them available in an advisory capacity to support the right outcomes.

On deal structuring, we strongly prefer residual equity and seller financing over earn-outs. Earn-outs can create misaligned incentives and put buyer and seller at odds over short-term results. Residual equity and seller financing keep long-term objectives aligned, which is where we want the relationship to be.

What advice would you give to other aspiring searchers in India who are considering launching a SF today? How do you think the role of local versus international capital will evolve in Indian SFs over the next 3–5 years?

To anyone considering launching a search fund in India, the opportunity is real and the timing is good. Don’t overthink it, get started. 

Here are a few specific pieces of advice on how to approach the journey.

• First, don’t rely on international capital as your primary source. Indian regulation is structured in a way that domestic capital will be the primary driver of acquisition financing. Build local capital pools first, and then approach international investors, not the other way around.
• Second, don’t get too drawn into the transaction journey. Deal-making is only one part of the job, and arguably not the most important part. The bigger challenge is running and scaling the asset post-acquisition. Before you commit to a search, honestly evaluate yourself not just as a deal-maker but as an operator. How well-suited are you to actually deliver value inside the business you are acquiring? That question matters more in the long run.

On the evolution of local versus international capital, we are genuinely optimistic. We strongly believe the domestic capital pool will expand significantly, with a growing base of patient capital actively looking to back searchers. We are very early in our journey right now, but in five years, Indian searchers may not even need to look outside the country to raise capital for acquisition financing.

In 2020, French searcher Philippe Saussol acquired Tethys, a specialist in pyromechanics applications and a recognized player in the defense sector. It was the second French SF acquisition (after the buyout of Performer in 2019 by Bruno Léa), and it was supported by Istria Capital, JB46, Cabiedes Capital, Inversiones Berrueco, Alcarama, Enrique Fernández (Insight One), La Financière Raffet, and CRG Investments, with the participation of Definvest, the fund of the French Ministry of the Armed Forces managed by Bpifrance, as well as the previous deputy manager Marc Schwindenhammer. The enterprise value was around €6M, with approximately €2,5M in equity and the remainder in senior debt financed by Caisse d’Épargne Côte d’Azur and Banque Populaire Méditerranée.

Founded in 2004, Tethys specializes in the design, development, and manufacturing of complex components and systems that harness the energy released by the combustion of energetic materials (powders, explosives), used in both military and civilian fields. Its areas of activity are diverse, ranging from defense (embedded products on naval and aeronautical platforms) and space to medical applications, including fire protection, cash protection, extreme sports, and nuclear safety. At the time of the acquisition in 2020, the company had a turnover of €3.5M with approximately €1M in EBITDA.

Under Philippe’s leadership, Tethys has experienced exponential growth over the past six years, tripling its revenue to almost €10M and reaching an EBITDA of €3.5M (in other words, it turned its 2020 sales into 2025 EBITDA!). The company currently employs 35 professionals and serves more than 30 clients, including Naval Group, MBDA, Satran, Ariane Group, Thales, Oberthur Cash Protection, Siemens, and Ifremer.

After an auction process that attracted numerous private equity players, Tethys ultimately came under the control of Abenex Small Cap II, valuing the LBO above €40M. The transaction was financed by Banque Populaire Méditerranée, Caisse d’Epargne, and BNP Paribas. The management of Tethys, led by Philippe, and Bpifrance reinvested in this new transaction. Philippe is confident in the company’s potential and expects it to reach €20M in revenue over the next five years.

This transaction marks the best exit so far from a SF (aside from a few standout performers in the United States that achieved extraordinary returns of over 20–50x). In essence, Tethys represents the perfect example of a SF acquisition that successfully leveraged three key value drivers:

1. Exceptional growth, increasing EBITDA by 3.5x over six years.
2. Initial leverage that was fully repaid (2x effect).
3. An exit multiple close to 12x EBITDA, delivering another 2x uplift compared to entry.

Result: an operation that can be simplified by the equation 3.5 × 2 × 2 = 14x. Although the exact figures are not public, the MOIC is estimated to be around 14x, making it the best exit achieved by a SF in recent years.

It is undoubtedly a major success for Philippe, who has demonstrated that in France—a country that has faced some challenges in the SF segment over the past two years—it is still possible to execute outstanding transactions. It is the first full exit of a SF in France, but over the past two years Performer and GHS have also completed partial exits through share buybacks, delivering strong returns to some of their investors and demonstrating that the French SF market is maturing and consolidating.

M&A (buyer): Solid Partners / M&A (vendor): Largilliere Finance / Legal (buyer): Lerins / DD: Oderis / Legal (vendor): Franklin