Carlyle in record €1.5bn Spanish deal

The Carlyle Group’s planned acquisition of Barcelona-based inspection services company Applus will be one of the largest private equity investment in Spain to date.

The Carlyle Group has agreed to buy Barcelona-based inspection, testing and technological services company Applus for €1.5 billion ($2 billion).

According to a prior agreement, Caixa Catalunya will also take a 25 percent stake in the company.

Applus is the largest company in its sector in Spain, with revenues of €546 million in 2006, and a presence in more than 30 countries. The company has four businesses: auto vehicle inspection; engineering, testing and certification; inspection and technical assistance and non-destructive testing.

In a statement Carlyle singled out Applus’s US vehicle inspection division and its non-destructive testing division as two businesses the private equity firm will try to enhance through add-on acquisitions in Europe and the US.

Pedro de Esteban, Carlyle managing director for Europe, said in a statement that the firm’s goal is to “consolidate [Applus] as a platform for sectoral and global growth, keeping the headquarters in Barcelona and relying on the current management team”.

Carlyle also listed in a statement some 10 companies already in its portfolio with which it expects Applus can generate synergies, including General Motors Transmissions, Kinder Morgan, and QinetiQ.

A group of banks including, among others, Barclays Capital, Calyon, Caja Madrid, Societe Generale and ICG will provide additional financing for Carlyle. Latham & Watkins was legal counsel for Carlyle. Goldman Sachs and GBS Finanzas were financial advisers for Carlyle, while KPMG and Bain & Co. did due diligence.