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In 2017, you introduced the Search Fund model to Italy and pioneered the market with the establishment of Tre Cime Capital. Can you tell us about your background and what led you to this accomplishment?
I’m a mechanical engineer and have been an entrepreneur from the start, building and growing companies in diverse sectors and across multiple continents, leading in operations, sales, and engineering. A significant milestone in my career was leading Makani Power in Silicon Valley, which was later acquired by Google X.
My introduction to the Search Fund model came during my MBA at IE Business School in 2013. Initially, I was introduced to the concept by a classmate, and though it intrigued me, I didn’t immediately grasp the full potential. After extensive research and engaging discussions with industry experts and professional investors like Blake Winchell, I began to recognize how this model aligned with my entrepreneurial background and long-term ambitions. With that realization, I set out to establish a duo Search Fund in Spain with a close friend. We dedicated eight months to fundraising, and just as we were about to secure commitments, my partner made the difficult decision to return to Germany for personal reasons. I fully respected his choice—as a leader, I believe friendship and personal values are always paramount. However, this shift required me to rethink my approach, especially as a foreigner with limited proficiency in Spanish.
After careful consideration and numerous discussions with investors, I decided to pioneer the ETA path in Italy. While the model was somewhat known in Spain, it was virtually unheard of in Italy at the time. Launching Tre Cime Capital was a leap into uncharted territory, but I was excited to help solve one of the major issues facing Italian SMEs: the lack of generational succession.
In just a few months, you convinced 18 investors to support you in your Italian venture. How challenging was the fundraising process? Who backed you, and what types of companies were you targeting?
When I relocated to Italy, I knew I had to find local investors to support my journey and replace some of my Spanish backers. Fundraising was definitely a challenge. It took around eight months to secure commitments, and I faced a lot of skepticism, especially from Italian investors. Some even told me the SF model would never work in Italy. They doubted it was possible to find companies that fit the profile or acquire them at the valuations we were targeting.
Despite these initial hurdles, I remained determined and worked diligently to win over my first investor, knowing that others would follow once confidence was established. As expected, once the first domino fell, the remaining commitments quickly followed. I successfully raised nearly €400,000 and secured backing from a group of 18 Italian and international investors, including institutional backers and accomplished entrepreneurs such as Granite Point Partners, Cabiedes Inversiones, Maurice Pinto, Frank Kenny, Bill Egan, Paolo Guida, and Daniele Benatoff.
I focused on three main sectors: packaging, IT, and healthcare, ranging from medical devices to diagnostics. As usual, I sought companies with strong fundamentals, recurring revenues, and clear potential for growth. My search was particularly aimed at family businesses with succession issues, generating between €5M and €20M in revenue.
It took you more than two years to finally acquire Orotig. How was the search process, and what challenges did you face in explaining your business model to potential targets?
The search process was long and often frustrating. It took more than two years to find the right company, and during that time, I had several near misses. I almost closed a deal on a software company, but after six months of negotiations, we couldn’t agree on the price. The company’s performance was declining, and it didn’t make sense to proceed.
One of the biggest challenges was explaining the SF model to potential targets. In Italy, the concept was largely unknown, and many business owners were suspicious. It took time and effort to convince them that my approach was different. I had to show them that I wasn’t looking for a quick buy-and-sell transaction but rather to invest in the long-term growth of their business.
I refocused my search on niche manufacturing, which aligned with my mechanical engineering background, and finally landed on Orotig. The deal was initially set to be signed in March 2020, but unfortunately, the COVID-19 pandemic postponed the acquisition to the end of 2020.
What attracted us to Orotig was its solid customer base and repeating revenue, with many customers purchasing annually. I was fortunate that all my investors supported the deal, so I didn’t have any equity gap to fill. Importantly, the sellers reinvested in the transaction, which ensured a smoother transition.
Tell us more about Orotig’s operations and how your integration into the company went.
With 30 years of history and headquarters in Verona, Orotig manufactures laser machines for various industrial applications, including jewelry and dentistry. The company specializes in developing and producing laser solutions for welding, marking, and cutting. Thanks to its innovative designs, Orotig’s products have become the benchmark for quality and reliability worldwide.
When we acquired the company, it had a solid customer base, with renowned brands like Bulgari, Tiffany, and Cartier, along with a well-established dealer network. My first priority was to gain a deep understanding of the industry and the unique quality of the products we offer. Integrating into the business was tough—it’s all about people. It was crucial to align the team with my vision without making radical changes to the company culture.
The integration process presented its own set of challenges. When I initially took over, Orotig had around 45 employees. As the company scaled, that number grew, and today, we have a team of over 80 employees. Managing this rapid growth has been one of the biggest challenges, especially in terms of maintaining the company culture and adapting the organizational structure. Some employees who were vital in the early stages found it hard to adapt to the demands of a larger company. But overall, we’ve improved processes and boosted production capacity, creating a more efficient operation.
Entrepreneurship is a roller-coaster journey, and this year has been no exception. With a more challenging market environment, we’ve had to continuously push our marketing, sales, and distribution channels to meet our objectives.
After four years of leading the company, what have been your main successes, and what are your future plans?
Our main success has been the company’s growth, partly driven by market evolution. When we acquired Orotig, its annual revenue was around €9M with €900k EBITDA. Last year, we closed with €21M in revenue and €3M in EBITDA. Part of this success stems from expanding internationally, especially in North America. My knowledge of the U.S. market helped build strong relationships with distributors, and we won the “Export Capital” Award two years ago for achieving the greatest sales increase in foreign markets in our category.
We’ve also significantly improved operational efficiency, restructured our debt, introduced new product lines, and continuously invested in R&D.
I’ve had the advantage of a very supportive board and the ongoing insights of one of the original sellers, who has been an invaluable resource during this journey. SFs are about teamwork. We aim to create value and honor the legacy of the founders who entrusted us with their company. As I’ve said before, it’s all about people, and I’m lucky to have an incredible team of professionals who are serious, passionate, and committed to demonstrating the excellence of Italian industry. Our guiding principles for sustainable growth are innovation, quality, and customer-centricity.
Looking ahead, we see potential for both organic growth and strategic acquisitions. We recently acquired a small company in Italy and are considering further expansion internationally. For now, our focus is on consolidating our position and driving growth. We’re not exploring any exit opportunities, as our priority is long-term growth.
The Italian Search Fund market has grown significantly over the past 18 months. What’s your take on this growth, and what advice would you give to new searchers?
It’s been incredible to see how the SF model has gained traction in Italy. I expect it to grow even more in the coming years. Italy is full of opportunities, particularly in the SME sector, where many family-owned businesses face succession challenges. I believe we’ll be able to close 100-150 transactions in the next few years.
My advice to new searchers is to be resilient. The process is long and often frustrating, but if you believe in the model and stick to your strategy, you’ll find the right target. It’s also crucial to build a strong network of investors and advisors who can guide you through the process. I didn’t have a “deal maker” background, so their insights during the acquisition phase were incredibly helpful. Finally, it’s not just about the market—it’s about the culture. When you double the size of a company, you’re often on your own, and constructing the roadmap is tough. The main challenge is aligning your team with your vision.
Many early searchers have transitioned into investors after their journeys. Is this something that interests you? How valuable do you think it is to have been a former searcher when transitioning to investing?
Yes, transitioning into investing is definitely something I’ve considered. It’s about giving back, and I’d love to do that. Having been a searcher gives you a unique perspective when evaluating potential investments. You understand the challenges and opportunities from both sides, which makes you a more empathetic and effective investor. I’m a firm believer in this asset class.
I’ve been approached by a few market players about various projects. For now, I’m focused on growing Orotig, which remains my priority. But in the future, I can see myself taking a more active role in supporting the next generation of searchers and helping them understand just how tough this path can be.
