Tikehau’s Miguel Cavero: Defence opportunities amid geopolitical uncertainty

Aerofondo, Tikehau’s fund focused on segments within the aerospace industry, acquired Formecal in early January.

Tikehau Capital will utilise secular trends in the aerospace industry to boost the consolidation plans for its recent acquisition of Formecal – a manufacturer of high-precision machining for the aerospace industry – according to Tikehau executive director Miguel Cavero, and Carmen Alonso, CEO for Iberia and the UK.

In early January, Tikehau acquired 100 percent of Madrid-based Formecal from Grupo Amper, via its Aerofondo fund. Formecal, a company specialising in hot-stamping, high-precision machining and the assembling of complex parts for aerostructures, will become part of a consolidation and growth project alongside Madrid-based Acatec, a high-precision machining company acquired by Aerofondo in October.

“Acatec and Formecal are very synergistic,” Cavero told PE Hub Europe. “As a matter of fact, the acquisition of Formecal has been done as an add-on. It won’t be an immediate merger, but it will gradually happen.”

The market in Spain is fragmented across verticals, according to Cavero, but especially so in the aerostructures and precision parts vertical. “We believe Spain has a big opportunity in terms of consolidation,” he added.

Tikehau strongly believes in the travel industry and the secular trends pushing it towards its pre-covid heights. “We believe globalisation, and the fact that the growing middle class in Asia is going to demand flights, are some of those long-lasting trends,” said Cavero.

Formecal, in comparison to Acatec, works more within the defence sector, another segment where Tikehau sees opportunities. The sector wasn’t as badly hit by covid as the civil side of aerospace, and the war in Ukraine offered a “new geopolitical picture, in which we’ve woken up and seen that we no longer live in a Disneyland world as there are wars around us, and we need to defend ourselves”, said Cavero. “This brings a very good opportunity to the defence sector as a whole.”

In terms of M&A, Tikehau is open for add-ons for both Formecal and Acatec. “We’re focused on organic growth, but that will be combined with inorganic growth, when we find the right targets,” Cavero explained. “It’s not just about buying revenues, it’s also about bottom line synergies.”

The Spanish market will be a focus for Formecal and Acatec, but Tikehau isn’t opposed to crossing some borders. “There’s always the option of pan-European consolidation,” said Cavero. “The option of Spanish companies acquiring capabilities beyond Spain.”

Better together

In Tikehau’s overall portfolio, around 15 companies focus on mechanics and precision parts. This allows for synergies with companies outside of the Aerofondo portfolio, said Cavero. “Our French portfolio companies can make orders from the Spanish companies, which can provide them with high quality parts and materials.”

Synergies help at the LP level too. In June 2021, SEPIDES, Airbus, Indra and Tikehau jointly committed capital to the Aerofondo strategy. It invests in companies across verticals and segments within the aerospace industry and can take control and minority positions.

For Alonso, this brings in an “ecosystem” that allows Tikehau to really understand the dynamics of the sector, and the state of the Spanish aerospace industry. “Having industrial companies in LPs and being the partners in the fund, and bringing all their knowledge and experience and expertise is quite a differentiating factor,” she said.