Industrias El Gamo (Spain) - Nov 2007

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01 November 2007

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MCH has acquired an 80% stake in Spanish air gun manufacturer Industrias El Gamo in a transaction valued at €70m. The remaining 20% stake in the company remains in the hands of the current owners who have reinvested in the company. The financial backer and the company management invested a total of €30m in the deal. The leveraged finance packaged was underwritten in equal parts by Fortis, Barclays and Banco Sabadell. The deal was originated by PricewaterhouseCoopers (PwC). The investors declared that “the transaction took eight months to complete; slightly delayed by this summer’s crisis”. According to PwC, the auction was won by MCH as it offered better options to staff than those an industrial investor would have done. The sponsor’s development strategy and the chemistry between the negotiating parts added value to their bid. This is the third acquisition by the Spanish house in the past year. Previous acquisitions include the purchase of Peluquerías Marco Aldany and the group comprising Mabyc and Ibersegur.

Company

Barcelona-based Industriales El Gamo was founded in 1959. Two years afters its creation the company introduced its first rifles to the Spanish market. Today El Gamo manufactures outdoor equipment such as airguns and air rifles as well as ammunition. In 1995, the company decide to reinforce its presence in the North American market. This came through the acquisition of a local distributor that became the Florida-based El Gamo US Corporation. The company’s turnover for 2007 is estimated at €70m. MCH expects to increase its exports which are mainly destined for the US market (70%), where El Gamo is among the top three players in the outdoor equipment sector. Additionally, the investors expect to grow by sub-contracting the production of goods with less added valued. MCH hopes to hold the company for four to five years allowing the development of the business plan.

People

Jose María Muñoz and Ramón Nuñez both of MCH Private Equity led the transaction.

Advisers

Equity - Deloitte, Javier Lancho (Financial Due Diligence)Equity - J&A Garrigues, Luis Guerreiro (Legal)Vendor - Cuatrecasas, Victor Xercavins (Legal)Vendor - Pricewaterhouse Coopers, Jusep Cedo (Financial Due Diligence)Vendor - PricewaterhouseCoopers, José de Carvajal (Corporate Finance)

Sourced from: Southern Europe unquote" 71 (Feb 2008)