Talde invests in Grupo Palacios Alimentación and takes a stake alongside ProA Capital and other financial institutions

August 2009

• This will be the first time Talde finds itself alongside ProA Capital, which in this case will hold the majority stake along with other reputable private equity financial investors (which includes Partners Group and Talde along with the latter´s management team).
• The deal was put together by Santiago Gomez, Fernando Elío y Pablo Arechabaleta representing ProA Capital, working with a banking syndicate which includes Santander, BBVA, La Caixa and IKB. BNP Paribas acted as global finance coordinator for the deal.

ProA took on Óptima Corporate as financial advisors, Latham & Wilkins for legal advice and KPMG as advisors on due diligence. The sellers hired the services of Merrill Lynch as financial advisors, Uria Menendez as legal consultants and the management team called in DLA Piper as legal advisors.

Familia Palacios divesting their stake in the group is the final step towards more professional management of the company; this process started in 1998, and by 2005 the family members only presence was on the Board of Directors. This concluded 30 years of consolidating the company as a leading industrial reference in the Spanish foodstuffs sector.

Grupo Palacios: A leader in the foodstuffs sector

Palacios Alimentación, S.A is a leading company in the spanish foodstuffs sector. Founded in 1983, it has reached a turnover of over €135 million and has under its wings more than 500 employees, making it one of the most important companies in La Rioja. Grupo Palacios has always excelled as an innovative and modern company which creates high added value products for the consumer. The company has built up a highly developed retail network and an ever-growing international presence. This has resulted in increasing recognition of its brands, and constant earnings growth.

The company has had a first class management team for 10 years since the original shareholders took the decision to create a more professional company and consequently gave up their executive positions. The current management team has concentrated on combining strengthening its leadership strategy in terms of cost along with significant diversification towards high added value refrigerated products such pizzas and ready cooked dishes.

Strategically, the company is concentrating its efforts on building distribution lines with the aim of becoming one of the largest operators in the market.

The company has a wide high quality, prestigious multiproduct range which includes products ranging from meat products and refrigerated cooked dishes through to pastries. The pizza business has become the Grupo Palacios main business line since the group has now achieved the number two position in the market, with special emphasis on the strength of its distribution line business - the company supplies the main Spanish distribution channels. The second business line on which the company is focusing is stringed pork sausage production (which was the company´s original business line) - the company continues to dominate and hold the number one position in this line.

Palacios has entered the ready-cooked refrigerated food market - a segment which is showing solid and sustainable growth and which is quickly becoming fundamental pillar for the company´s future growth. Other products that the company os focusing on include omelettes, rolls, sandwiches and pastries.

Grupo Palacios is a leading benchmark in the sector in south Europe, and intends to accelerate the strategy that has been so successful in its last 10 years of growth, both organically and through acquisitions.

ProA Capital

ProA Capital was founded in May 2007, and covered its first fund with 250 million euros in April 2008 - ProA Capital Iberian Buyout Fund I.

The fund was created by seven professionals who all have considerable experience in the Spanish venture capital sector. The fund is managed by Fernando Ortiz, a partner director of ProA Capital.

The fund is noteworthy due to the presence of international institutional investors who hold 82 per cent of the fund alongside some of the largest Spanish financial institutions and pension funds.

The profile of investments is focused on mid-size companies valued at between 25 and 200 million euros (the mid-market).

Talde

The Talde Group, founded in 1977, finances SMES to aid development and provides support for management in the companies in which they hold stakes. In over 30 years, Talde has invested in more than 135 companies and has invested over 140 million Euros.

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