Nazca Capital buys Terratest from Platinum Equity

According to press reports, the company was valued at approximately €200m, which equates to more than 6x its 2018 expected EBITDA.

Unquote understands that in addition to Platinum's 80% stake, Nazca also acquired the remaining 20% holding from Madrid-listed construction group Acciona and investor Pedro López Jiménez.

Aberdeen Standard Investment took part in the acquisition as Nazca's co-investor, alongside Nuova Energia and Oquendo Capital.

Tikehau Capital, via its asset management subsidiary Tikehau IM, supported Nazca's acquisition by rolling-over the existing debt financing provided in May 2017 and January 2018 and also deploying an additional €1.2m. 

Following the deal, Terratest CEO Enrique Torres will stay on with the business and continue to lead the company.

Terratest plans to use the fresh capital to further boost its international growth – especially in key geographies such as the US – and develop new large infrastructure projects globally.

The GP deployed capital from its Nazca IV fund, which held a final close on its €275m hard-cap in December 2016. Unquote understands that the firm intends to launch a fifth fund with a €150m target in Q1 2019. The vehicle will invest in small-sized companies and deploy equity tickets between €7-25m.

Previous funding
The sale ends a four-year holding period for US-based PE firm Platinum Equity, which acquired Terratest as part of a recapitalisation plan to both deleverage the company and give it the foundations for future investments. Capital for the transaction was drawn from Platinum Equity Capital Partners III, which held its final close on $3.75bn in September 2013.  

Subsequently, Tikehau Capital issued a €60m unitranche facility for the company in May 2017. The deal saw Tikehau act as sole arranger for the credit package, which was used to boost the company's international expansion and organic growth. In January 2018, Tikehau provided an additional €14.4m to finance Terratest's acquisition of US-based Geostructures. 

Company
Headquartered in Madrid, Terratest is a ground engineering business specialising in foundation work, ground improvement and micro-tunnelling services for infrastructure, industrial, commercial and residential projects. The company was founded under the name Craelius Diabor in 1959 as a subsidiary of the Swedish company Sveska Diamantberborrin. It has a presence in 25 countries across Europe, the Middle East, Africa and the Americas, and employs 1,300 staff. Unquote understands that Terratest expects to generate EBITDA of €32m from revenues of €220m in 2018. 

People
Nazca Private Equity – Carlos Pérez de Jáuregui (partner).
Terratest – Enrique Torres (CEO).
Tikehau IM - Carmen Alonso (head of Iberia).

Advisers
Equity – Lincoln International (corporate finance); Sigrun Partners (corporate finance); Uria & Menéndez (legal).
Company – Rothschild (corporate finance); Baker Mckenzie (legal).

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