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HIG makes first investment from Madrid office

HIG Capital has invested €16m in a Spanish provider of audiovisual services. The investment comes after rating agency S&P downgraded Spain's credit rating to BBB-.

The European arm of Miami-based firm HIG Capital has acquired a 49.99 percent stake in Vértice 360 Servicios Audiovisuales (VSA), a Spanish provider in audiovisual services, for €16 million, it said in a statement.

VSA is part of Vértice 360, a provider of technical services and equipment for audiovisual production and advertising that is listed on the Spanish stock exchange. Vértice 360 will hold the remaining 50.01 percent of the company.

On top of the investment, HIG Europe will pay Vértice 360 an additional €2 million through the distribution of VSA’s available reserves. If the company performs to expectations, HIG will pay the business another €2 million.

The investment will be the first transaction made from HIG’s Madrid office, which opened early this year, and comes just after credit rating agency Standard & Poor’s downgraded the country’s credit rating to BBB-.

In February, HIG Europe appointed Jaime Bergel, who used to be a former chief executive at Spanish private equity firm Gala Capital and a former Goldman Sachs banker, to head the Madrid office. HIG’s co-founder Sami Mnaymneh downplayed the Spanish economic woes at the time. He told Private Equity International: “There are many attractive businesses there, and despite the short term challenges, we have every confidence that in the long run, the Spanish economy will recover and get back on a growth path.”

“VSA is HIG Capital’s first investment since we opened our Madrid office earlier this year, with the clear objective of investing in leading Spanish businesses. In today’s uncertain market, HIG believes that the Spanish economy offers opportunities, particularly in the dynamic, midmarket companies which are set to lead the countries recovery,” Jaime Bergel, managing director of HIG Europe in Spain, said in the statement.

HIG Europe has invested in Spain before. In 2010, it invested in Nuter, a Spanish animal feed and nutrition company. It has completed 22 transactions in Europe since 2011.