Working with us
Sparring Capital takes majority stakes in unlisted SMEs, with the objective of accelerating their growth as part of a long-term value creation strategy.
The companies in which we invest have the following characteristics:
- Turnover >10 M€ – Ebitda > 2 M€
- Strong position in their market
- Strong fundamentals and history of profitability
- Well identified and actionable growth potential over our investment cycle (5-7 years)
Without any sectoral bias, we have developed an excellent knowledge of value-added BtoB services and specialized distribution. We devote the time and resources necessary to understand the challenges of the companies and their potential in order to establish with the management a realistic and ambitious value creation program. Beyond the sector of activity, we invest above all in companies led by talented and ambitious management teams.
We prefer “Management Buy Out” situations, which consist in relying on the existing management team, but we also invest in companies whose management succession has yet to be organized (“Management Buy In”). We generally invest between €7m and €20m per operation, but existing co-investment agreements with our underwriters allow us, when necessary, to significantly increase our intervention capacity.
Our added value
Through our numerous investment operations, we have built a methodology, a base of experience and a broad network of skills that we make available to our clients. Our contribution is part of an open and permanent dialogue with the management teams, whose management autonomy we respect and whose entrepreneurial spirit we support. We share their determination to grow their businesses and want to be a helpful partner. Our support is mainly focused on the following issues:
- Establishing efficient governance to improve decision making
- Clarification of the strategic roadmap by defining the priority areas for growth
- Structuration et renforcement des organisations (recrutements clés, professionnalisation des équipes)
- Acceleration of organic growth through investments in sales and marketing resources
- Stimulation of innovation to make the difference with respect to competitors
- External growth operations
- Improvement of activity management tools
- Strengthening and optimizing financing
In addition to our own skills, we provide our participants with a vast network of experts, familiar with the environment of small and medium-sized companies and capable of intervening on a wide range of issues: sales acceleration, digitalization, improvement of industrial processes, optimization of working capital, coaching of management committees, etc. This expertise and know-how saves precious time in implementing business plans or making the necessary adaptations in the face of unforeseen events.
Combining the vision of company managers with our experience as a professional investor, sharing a common view of the company’s project and the same determination to give substance to this ambition, creating a frank and trusting relationship: this is the basis on which we build our partnership with management teams.
Finally, each of our investments is based on a perfect alignment of interests between management and Sparring Capital: the managers of our investments are systematically shareholders alongside us and we put in place incentive profit-sharing mechanisms that reinforce this alignment of interests.
From the outset, the roles and responsibilities of each party are clearly defined in a shareholders’ agreement, which sets out unambiguously the rules of governance, in line with the best standards. Strategic and financial decisions are made by the supervisory board, in which Sparring Capital plays an active and constructive role by contributing the experience it has accumulated through its numerous investments. This organization provides the necessary hindsight to make strategic decisions and to deal with imponderable events. It also marks Sparring Capital’s desire to respect the operational management autonomy of the managers who retain the presidency of their company. Together with the management, we determine the main priorities through a detailed action plan, the foundations of which are laid even before our entry into the capital. This action plan summarizes the value creation program that will be implemented with the support of Sparring Capital, in order to optimize the exit conditions at the end of our investment cycle (generally between 5 and 7 years). It is based on credible assumptions and an implementation schedule. It relies on the fundamental qualities of the company and the management team, to do better what was already well done and to accelerate the development thanks to the identified value creation levers.