Nazca Capital buys EUREKAKIDS

Nazca has become a majority shareholder, buying the 40% stake held by the Comet investment vehicle (owned by a number of high-net-worth individuals) and then subscribing to a capital increase. EUREKAKIDS' founder retains a minority stake.

The deal, which had an Enterprise Value of between €20-40m, represents the first investment from the Nazca III vehicle, which closed on €200m in April.

Nazca was introduced to the company by corporate finance adviser Eurohold. It already has experience in high-growth retail projects thanks to its previous portfolio companies Svenson (hair treatments), Rodilla (fast food) and Lizarrán (food), and impressed EUREKAKIDS with its understanding of the company's business plan and its alignment with the founder's strategy. This will involve executing an ambitious online initiative and a national and international expansion plan, which includes the opening of 100 stores over the next five years, including 34 this year alone. A further 68 staff members will also be hired, with the objective being to maintain the company's growth rate and help it become one of Europe's most recognised toy brands.

The private equity firm was attracted to EUREKAKIDS due to its high growth potential, which was demonstrated by its 30% growth over the past two years. At present, 77% of the company's sales hail from the Spanish market, with a further 15% coming from online avenues.

Debt
No debt was used in this transaction.

Company
Gerona-based EUREKAKIDS specialises in selling educational toys for children of up to eight years of ageonline and through a network of 100 stores in five countries. It was founded in 2002 and has more than 100 staff.

The company generated an EBITDA of €2m on sales of €18.5m last year and expects this to increase to €3m (EBITDA) and €20m (revenue) in 2011.

People
Carlos Carbó, managing partner, led the deal on behalf of Nazca. He joins the company's board alongside associates Carlos Jauregui and Juan López de Novales. Erik Mayol, founder of EUREKAKIDS, will continue in the role of executive chairman.

Advisers
Equity – Ferreras Abogados, Ester Escrivá de Romaní (Legal); KPMG (Legal, fiscal and financial due diligence).
Vendor – Eurohold, Ferran Conti (Corporate finance); Vialegis, Paloma Rubalcaba (Legal).

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• Topics
• Southern Europe
• Consumer
• Buyouts
• Spain