The Palacios Group begins a new stage

Proa Capital began with the purchase of the Palacios Group

The risk capital firm Proa Capital, set up back in 2007, has completed the first operation in its history with the purchase of the Palacios Group, a benchmark company in the Spanish food sector.

Also participating in the operation, for a quantity that has not been revealed, were the risk capital company Talde, the international administrator Partners Group, also investors in the fund launched by Proa Capital last year that is endowed with 250 million Euros, and the food group management team. Proa Capital's aim is to position its companies in the so-called middle market whose value lies between 25 and 200 million Euros.

The purchase involved a national and international bank syndicate that provided the debt, made up of Santander, BBVA, La Caixa, Caja Madrid, IKB and BNP Paribas that was the overall financing coordinator.

Sector sources estimate that the operation ratios, referring to the cash and debt provided, are in line with what was common in the sector five years previously, when they stood at around 50-50, after which leverage levels took off. "The debt for the operation has been prudent, without compromising the group's future, although with tough financing conditions."

This change in shareholders means that the Palacios family are leaving the Rioja company that they founded in 1983. Over these years, the group has raised its turnover to over 135 million Euros and has 500 employees.

The attraction of the Palacios Group lies, according to the same sources, in the fact that it has a good market position in the store brand market, such as pizzas and chorizos. In the latter case "its star product, Chorizo Palacios, is quite cheap. Specifically, its product range is priced under three Euros so, in times of economic crisis, the sales are behaving quite well."

Add this to the diversification made in the products when entering the world of ready meals, such as omelettes, sandwiches, etc. "The company is increasing its macro view and strategic view, giving it good perspectives in the short and long term"