South Africa: Secha Capital leads investment in Barracuda
Barracuda Holdings is a South African electronics manufacturing services business.
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Secha Capital, as lead investor, in conjunction with 27four and Shade Tree Capital, today announced an investment in Barracuda Holdings, a South African electronics manufacturing services (EMS) business.
The transaction also marks the debut of the chief executive operator investor (CEOI) model developed by Secha Capital – a search-fund-style approach designed for emerging markets that embeds a next-generation owner-operator in the business with meaningful skin in the game. Through this model, Aengus Stanley, through Shade Tree Capital, originated and led the deal process with support and guidance from Secha Capital.
Barracuda is a South African EMS company that specialises in high-mix, low- to medium-volume PCB assemblies and related electronics. It serves customers across telematics, industrial automation, energy, defence, aerospace and space technology. Barracuda’s commitment to agility, quality and innovation has made it a trusted partner to more than 100 clients.
As part of the transaction, Aengus Stanley, founder of Shade Tree Capital, will become Barracuda’s chief executive officer and a significant shareholder, assuming responsibility for the day-to-day running of the business. The founders, Rob Steltman and Ryan Webb, will remain actively involved in the business for the next several years in more focused roles. This will enable them to devote additional time to key customer relationships and selected high-value engineering and operational projects, working closely with the new management team to ensure continuity and knowledge transfer. Seshan Chettiar, from Secha Capital’s team, will also join the management team in the near term to support the transition.
“This next chapter for Barracuda is about building on the strong foundation,” said Aengus Stanley. “We are excited about combining the experience we bring from other industries with the current team’s deep EMS expertise.”
“The next decade in South Africa won’t be defined by capital alone; it will be defined by execution capital – money that arrives with an embedded CEOI, an operating playbook and a deep focus on delivery,” noted Brendan J. Mullen, managing director at Secha Capital. “Barracuda is a great example of this partnership in action: experienced founders, an on-the-ground CEOI through Shade Tree Capital, and aligned institutional investors.”
“South Africa’s industrial and electronics sectors are critical to the country’s competitiveness, and offer a platform to broaden skills and create quality jobs in skilled manufacturing,” added Rory Ord, head of private markets at 27four. “By backing locally embedded owner-operators and founder teams, we believe this model can be replicated across many founder-led industrial and engineering businesses over the coming years.”
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Really smart move here. The CEOI model basically solves the biggest issue with African PE which is finding operators who know how to run a busines locally. Having Aengus take CEO role with real equity means he's actually incentivized long-term not just collecting mangement fees. Also I bet the founders staying on for transition makes a huuge difference because EMS is all about those client relatoinships and technical know-how that takes years to build.