N+1 Private Equity buys Portuguese manufacturer(2)

With 45% of its revenues coming from Latin America, Probos fits well with the strategy that N+1 has been actively pursuing since its merger with Spanish rival Mercapital.

N+1 Private Equity, a Spanish buyout firm, has teamed up with Dinamia, a Spanish-listed private equity firm, and the company’s management to acquire Probos, a Portuguese manufacturer.  

The firms bought the company from Explorer, another private equity group, for approximately €75 million. N+1 acquired a 73 percent stake, while Dinamia spent up to €12 million for a 24 percent stake. The management of Probos took the remaining 3 percent ownership stake in the company, according to a source close to the matter. 

It is understood 60 percent equity was used for this transaction and 40 percent debt. N+1 took over the company’s existing debt and no new leverage was brought in, the source said.   

Probos, founded in 1977, is a manufacturer of plastic edge bands for the furniture industry. Its products are produced from polymer, such as PVC. The business, which reported revenues close to €58 million in 2012, is predominantly export-focused. Last year, almost 90 percent of the company’s revenues were generated outside the Iberian Peninsula, with 45 percent coming from Latin America. 

This Latin-American focus fits in with the strategy of N+1 Mercapital, the entity that is currently being created following the merger between N+1 and fellow Spanish firm Mercapital. The two competitors decided to team up last summer to “better adapt to a difficult environment”, Eusebio Martin, a partner at Mercapital told Private Equity International in December. The combined entity will become the biggest private equity group in Spain, the firms said. 

As the Spanish economy continues to struggle, N+1 Mercapital plans to push further into Latin America, where it hopes to benefit from the promising GDP figures in the region. Mercapital already has offices in Mexico and São Paulo, and plans to open an office in Bogota this year. “N+1 [has] more resources, so this means we can send more people there,” Martin said at the time. 

Last month, Mercapital acquired an 80 percent stake in Betapack, a Spanish company that produces plastic caps for bottled water, oil, soft drinks, dairy and juice, and Mirvi, its Brazilian subsidiary. Following the €40 million investment, Mercapital’s Spanish Private Equity Fund III, a €550 million, 2006 vintage, was fully deployed. N+1 still needs to finish investing its fund before the firms come to market together, Martin said. 

Following the investment in Probos, N+1’s €304 million Private Equity II, a 2008 vintage, will have room for one more investment, the source said. It is understood N+1 Mercapital aims to start fundraising by the end of 2013.