Private Equity Investors With Interest In Spain

Private Equity Investors With Interest In Spain

Spain is shaping up as an attractive investment option for private equity firms betting on a return to economic growth thanks to the government’s programme of structural reforms.

The global financial crisis has battered corporate and real estate valuations in Spain, but many experts believe prices are close to bottoming out and the market is now ripe for M&A opportunities.

Bahrain-based Investcorp and Coller Capital, the leading global investor in private equity’s secondary market, are sniffing around, while the world’s top investment fund Blackstone and its US peers Advent International and Fortress Investment Group are also eyeing Spanish assets.

Blackstone and Advent are no strangers to Spain, with acquisitions already under their belts. In 2010, Blackstone picked up Spanish packaging company Mivisa, alongside local buyouts firm N+1, for 900 million euros.

Last year, Advent bought a 50 percent stake in explosives supplier Maxam for around the same amount. It plans to close at least one deal before the end of 2013, and Spain’s health sector is on its radar.

Investcorp made its first foray into Spain last year with the purchase of Esmalglass, a leading global supplier of products for the ceramics industry.

New kid on the block Fortress Investment has set it sights on assets managed by Spain’s “bad bank” Sareb. Blackstone is also circling Sareb, according to market experts. Sareb was set up as part of a 40 billion-euro European bailout of Spanish banks that were laid low by a property crash five years ago.

Possible M&A Opportunities

Spain is famous for its great value daily lunch menus available in restaurants across the country. So is the menu on offer for investors just as appetising? Here are some suggested dishes:

• Sareb’s around 90 billion euros of assets, such as undeveloped property and unfinished buildings, which it is selling off at significant discounts. Private equity specialists are attracted by the yields these properties can generate in the mid-term.

• Hotel properties in cities like Barcelona which offer high performing assets at affordable prices. Against the backdrop of a booming tourism industry, Spain’s hospitality sector is a sound bet.

• Opportunities in health care. Spain’s health sector is facing many challenges amid the overhaul of publicly-funded services. The hospital management business is a good deal for private equity firms.

• Small and and medium-sized enterprises (SMEs). Top picks are distribution companies geared to exports, given the upsurge in Spain’s exports in the past months and expectations for future growth.

For information on private equity opportunities in Spain, contact Argali Abogados.

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