Nmás backs construction sector build up

The Spanish private equity house has taken an 80 per cent stake in Spanish construction firm General de Alquiler de Maquinaria in a transaction worth E76m.

Nmás1, the Spanish private equity firm which closed its latest fund on E175m in April, has backed a consolidation play in the Spanish construction equipment rental market, investing E24m in General de Alquiler de Maquinaria (GAM).


Nmás is backing GAM, which leases equipment ranging from cranes and platforms to light machinery, in its acquisition of three companies in the sector. The business is acquiring 100 per cent of T.Cabrera and Alquioviedo and 60 per cent of Aldaiturriaga.


The total enterprise value for the transaction is E76m. Equity capital comes from Nmás1 (E24.1m), Spanish savings bank Caja Asturias (E2.9m) and managers of the respective businesses. Additionally, there will be vendor loans for E8.5m, acquisition debt of E5m and rollover debt and equity for E28m and E6m respectively.


Aggregate sales for the newly-formed group are E54m, with EBITDA exceeding E23m, making the business one of the biggest companies operating in the sector.


Nmás1 has been pursuing buy and build opportunities in the construction market for over a year. In a statement accompanying the investment the firm said: “Over a year ago, Nmás1 identified the possibility of conducting a transaction in the sector.” The sector is highly fragmented, with more than 1,500 companies, small sized, local businesses which are typically family-owned. The sector was estimated to be worth E1.6bn in 2002.


“The transaction is the culmination of a process that is already taking place in Europe,” said Lorenzo Martínez, a partner at Nmás1. “These types of build up transactions are becoming increasingly common in the Spanish private equity market.”


This is the second buy-and-build backed by Nmás during the past two years following its 2001 investment in Unica, now the second largest company in the Spanish industrial cleaning sector.


The investment was made from Nmás1 Private Equity Fund, which closed on E175m in April. The fund received commitments from Access Capital Partners, CAM Private Equity, CPR, Electra Investment Trust, Finama, LGT, and Wilshire. In total, Nmás1 Private Equity now advises funds in excess of E300m.


Spanish private equity investment has seen a sizeable increase during the first half of 2003, according to data published by ASCRI, the Spanish venture capital association. The data revealed a 25 per cent increase on the same period in 2002, reaching E415m. Funds raised was up 38 per cent at E385m.