Mercapital has invested €40 million to acquire an 80 percent stake in Betapack, a Spanish company that produces plastic caps and closures for bottled water, oil, soft drinks, dairy and juice, and Mirvi, its Brazilian subsidiary.
The Madrid-based firm plans to consolidate the company’s position in the European bottled water sector as well as boost the development of new processes and products.
As well as expanding Mirvi’s Brazilian plant, the company aims to tap into other Latin American countries where the increase in disposable income is driving rapid growth of consumer goods, such as beverages, Mercapital said in a statement.
Mercapital, which already has offices in Mexico and São Paulo, wants to push further into Latin America. A quarter of the firm’s portfolio revenues comes from Latin America, which Mercapital plans to increase to over half of the revenues, Eusebio Martin, a partner at Mercapital told Private Equity International during a recent interview.
This is one of the reasons why the firm will merge with N+1, a fellow Spanish firm. “We already have a presence in Latin America, but N+1 has more resources, so this means we can send more people there,” he said. Mercapital will be opening another office in Bogota this year. The firms decided to join forces to “better adapt to a difficult climate,” he said.
The merger between Mercapital and N+1 will create the largest private equity firm in Spain and will invest in mid-market Spanish companies willing to grow internationally, particularly in Latin America. That’s where Spanish companies need to find growth, Martin said. “Most large Spanish companies make more money in Latin America than in Spain. For Spanish companies it is clear they need to get to Latin America,” he said.
Following the investment in Betapack and Mirvi, the firm’s Mercapital Spanish Private Equity Fund III, a €550 million, 2006 vintage, is now fully deployed. N+1 still needs to complete its fund before the firms can raise a fund together, Martin said.