Three Hills Capital Partners (THCP), a London-based investment firm, has completed a €15 million investment in Spanish laser hair removal company Pelostop, a first step into the Spanish market for the credit fund.
Of the €15 million, €12.1 million will be debt and €2.9 million is a preferred equity investment. In exchange, THCP obtains a 12 percent stake in the company.
It’s the first entry into Spain for the asset manager, which recently closed its second fund in July on €200 million. The firm has previously backed the well-known UK restaurant chain Byron Burgers and has used funds from the latest vehicle to invest in sports data company Genius Sports Group and fashion retail platform Tomorrow.
THCP writes tickets between €15 million and €50 million, but is open to working with existing investors to finance loans up to €100 million. PDI data states that the firm raised €100 million for its debut vehicle, which targets sponsorless transactions. For the latest fundraise, THCP worked with Switzerland-headquartered asset manager Decalia.
Pelostop has 57 retail locations across Spain, including in Madrid, Barcelona and Seville. Established in 2005, the company describes itself as a “pure play” laser hair removal service.
Es Vedra Capital Advisors (EVCA) worked with THCP on financing the deal, providing 20 percent of the capital. EVCA specialises in providing growth capital to companies operating in the consumer, retail and technology industries.
Law firm Cuatrecasas advised both THCP and EVCA while Alentta Abogados worked with Pelostop. Ernst and Young completed the due diligence on the transaction.
Francesc Casanovas, chief executive of Pelostop, explained that opting for debt financing to facilitate the company’s growth ensures that the firm’s existing shareholders are not diluting their ownership too much. “This transaction has allowed the current shareholders to reinforce their ownership of the company, and has provided additional resources for our planned expansion during the next five years.”
Mauro Moretti, managing partner of THCP, said: “The investment in Pelostop marks the first step in Spain, a market that we have been studying and analysing for the last two years, which is now becoming a core market for us.”
Spain has increasingly attracted the attention of debt investors as more and more deals are completed in the country and firms are beginning to raise for successor vehicles. In September, Oquendo began collecting for its third vehicle targeting investments in the country and Incus reached a final close on its second fund in July after raising €270 million.