Ergon Capital buys Indo in SBO

Alessia Argentieri
25 June 2018

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Ergon Capital has acquired a majority stake in Indo, a Spanish manufacturer of ophthalmic lenses, from Sherpa Capital, which has retained a 20% holding in the company alongside management.

The GP deployed capital from Ergon Capital Partners III, a €350m buyout vehicle raised in 2010 and subsequently increased by €150m in July 2016, reaching a total commitment of €500m. The vehicle invests equity tickets of between €25-75m in mid-sized businesses based in Benelux, Italy, Iberia, France, Germany and Switzerland. It has recently completed the sale of its majority stakes in Golden Goose and ELITech, and invested in Keesing Media Group. Ergon launched its fourth fund in December 2017 with a target of €500m and expects to reach a final close by the end of 2018.

Private debt provider Oquendo Capital also took part in the Indo deal via its Oquendo III fund, which held a final close on its €200m hard-cap in October 2017 and is now nearly 60% deployed. The fund provided a package composed of a mix of mezzanine financing and minority equity, co-investing alongside the new sponsor and the seller, the GP told Unquote.

With the fresh capital, Indo plans to bolster its growth both organically and through a buy-and-build strategy, and intends to further expand in Spain and internationally over the next few years.

The SBO ends a five-year holding period for turnaround investor Sherpa Capital, which acquired Indo after it hit bankruptcy in a deal that included a €1.4m equity injection and a further €5m commitment in working capital. Sherpa bought the company via its Sherpa Capital II fund, which held a final close on €100m in 2014. According to the GP, the company's enterprise value was around €17m.

Company
Founded in 1937 and headquartered in Sant Cugat del Vallès, near Barcelona, Indo manufactures ophthalmic lenses sold to independent stores and retail chains. It also supplies optical and ophthalmologic equipment to the eyecare sector. The company employs 350 people and operates two plants located in Spain and Morocco.

People
Indo – Jean-Luc Morabito (CEO).
Ergon Capital Advisors Spain – Emanuele Lembo (managing partner); Pablo Álvarez Couso (principal).
Sherpa Capital – Eduardo Navarro (CEO, executive chair).