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With a robust background in M&A and Finance, Pierre Donvez, a half-French, half-German professional, discovered the Search Fund (SF) model during his MBA at IESE Business School and launched Sillage Partners in 2021. His IESE classmate, Rafaël Dufour, an industrial engineer with extensive experience as a managing director of SMEs in foreign countries, followed in his footsteps and launched Relais du Dirigeant in 2022.
From the outset, both entrepreneurs began exchanging information regarding their respective deals and experienced the benefits of exchanging with a partner that share the same adventure. Pierre was more inclined towards the Tech sector, while Rafaël was seeking an industrial company. Pierre engaged with a SAAS company, but after an extended period of negotiation, the deal fell through due to a decrease in the target company’s growth. Following the emotional rollercoaster experienced by any entrepreneur, Pierre decided to refocus his search and explore broker deal flow (quicker deals with more committed sellers) while simultaneously studying an intriguing industrial opportunity. Meanwhile, Rafaël was working on another opportunity that fell apart after 8 months of negotiation due to a change of heart of the seller who couldn’t let it go.
As the discussion with the industrial company advanced further, Pierre asked Rafaël for his support in the DD to understand the risk and opportunities of this industrial niche. As the process advanced further, Pierre visited Rafaël in Lyon while signing an initial Letter of Intent (LOI) on ASP & Alsameca. They discussed the potential acquisition and, considering the synergies they could have together, decided that it might be interesting to collaborate. They embarked on a round of calls to all their investors and were fortunate that everyone was very enthusiastic and collaborative. Incidentally, 40% of their cap table was shared. They then consulted their lawyer, Spark Avocats, and discovered that there weren’t any legal impediments for them to merge their two SFs if all the shareholders agreed to it. A few months later, they successfully acquired ASP Group, now renamed Sharp Tools Group.
Both of them found this experience very positive, but, as they explained, it’s important to align all the different interests. Technically, it’s possible to merge two SFs, but the key is to ensure that 1+1=3. Both had to relinquish their potential 25% equity to each other to share 30%. Therefore, the deal had to have a significant size to be interesting. Moreover, the value of the business plan they prepared together was more ambitious than if they were acting solo, and they each had a clear role—one focusing more on management, and the other defining the strategy and potential build-up.
At Search Funds News, we believe this example is a perfect winning combination for professional searchers to team up with another with different experiences (M&A/Finance + Industrial/Engineer + SMEs Managers). Most duo searchers we have seen are colleagues with the same background (two consultants, two private equity professionals…), but this kind of merger between two different searchers might be a key to success in acquisitions and a way to avoid the challenging solo experience. On this occasion, it’s the deal that made the duo.
