Bill Gates Bets on Spanish Security Firm Prosegur

Bill Gates Bets on Spanish Security Firm Prosegur

Bill Gates Bets on Spanish Security Firm Prosegur

Just a few months after grabbing 6 per cent of construction firm FCCBill Gates is back on the acquisition trail in Spain. And recent encouraging economic data, coupled with upbeat recommendations from investment banks like JPMorgan Chase, is proof that Gates is bang on target.

This time round, the Microsoft co-founder has bet on Prosegur, a specialist in the private security business and one of the country’s most successful mid-cap firms. On January 10, Gates was one of a small group of international investors who acquired between them 4 per cent of Prosegur’s treasury stock in a deal valued at 123 million euros.

Treasury stock refers to shares repurchased and retained by the issuing company, reducing the amount of stock on the open market. Gates’ FCC investment last October was also made via a treasury stock purchase by two of his investment vehicles.

His Cascade Investment fund is now believed to hold nearly 3 per cent of Prosegur.

PROSEGUR: A MULTINATIONAL MID-CAP

Shares in Prosegur rose over 5 per cent in early trade on February 11 when the news of Gates’ renewed interest in Spain broke.

But why has one of the world’s top investors chosen Prosegur for his portfolio? Excellent management, a sound long-term strategy and a strong international presence – particularly in Latin America – are three good reasons.

In 1987, Prosegur became the first Spanish security company to sell shares in an initial public offering. In 1995, it expanded to Latin America, where it became a market leader. Like many Spanish firms, Prosegur cashed in on historic, cultural and linguistic ties to invest in the region, reaping the benefits when the economic crisis hurt business at home.

Madrid-based corporate law firm Argali Abogados has worked with Prosegur for many years, advising the firm in different acquisitions in Brazil, Colombia and Bolivia. Now present in four continents – Europe, South America, Asia and Oceania – Prosegur is a multinational company offering global and comprehensive security solutions.

PROSEGUR TO BENEFIT FROM SPAIN RECOVERY

Gates’ decision to invest in Prosegur has been hailed as a re-affirmation of his confidence in Spain’s economy. While the security firm’s overseas operations will remain a key earnings’ driver, the expected recovery in domestic demand – closely linked to the recent positive data on Spain’s service sector – will also fuel an uptick in Prosegur’s local business.

So what’s next on Gates’ Spanish agenda? His investment in Prosegur is relatively small, so there is room to increase that stake. Prosegur still holds about 3 per cent of treasury stock, which could be made available, analysts say.

As Spain emerges from the doldrums, there will certainly be no shortage of other M&A opportunities.

For information on Prosegur, contact Argali Abogados.

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