Secondary Investment: Gradiente

Sourcing

NORD Holding’s extensive network and focus to find promising small-cap managers led our team to meet in 2017 with Gradiente, an Italian private equity firm focused on small-cap succession buyouts, predominantly sourced in the greater Venice region. Based on a highly structured portfolio development approach, Gradiente actively supports its portfolio companies, carrying out effective transformation processes with a special focus on professionalizing management, international expansion and optimizing operational efficiency.

When NORD Holding first met Gradiente, the company was set up in a captive structure, limiting the options for further fundraising and development of the structure. Moreover, one large shareholder in the structure was looking for a liquidity event. NORD Holding successfully explored a stapled secondary opportunity.

Structuring

Part of the due diligence were meetings with the CEOs and CFOs of the most relevant portfolio companies to confirm assumptions and understand future value drivers of the portfolio. The outcome of our full due diligence was positive and therefore we structured an attractive investment by acquiring a significant commitment from the selling shareholder, enabling the team of Gradiente to successively acquire a majority stake in the management company and raise Gradiente Fund II accordingly. Both funds are performing successfully to date.

Value-add

NORD Holding supported the carve-out by the Gradiente team of the management company and helped to develop a market standard LPA for Gradiente Fund II.

Follow-on

After the stapled investment in Gradiente was executed, NORD Holding co-invested alongside Gradiente in HPF, the first Gradiente II portfolio company. It is NORD Holding’s aim to support the international expansion of the company towards Germany.

We are very grateful to Nord Holding for their continuous support and role as sparring partner. By acquiring a stake in Gradiente I from a selling investor, Nord Holding not only validated our strategy but also gave us the international institutional backing and credibility that allowed us to successfully close Gradiente II at its hard cap.

Pietro Busnardo
Founder & CEO, Gradiente