European buyout firm Doughty Hanson has sold one of its Spanish portfolio companies to a Mexican trade buyer, amid increasing appetite for foreign businesses among Latin American acquirers.
The London-based firm said in a statement Thursday that it had sold Spanish bus and bus station operator Avanza Group to Grupo ADO, a bus operator based in Mexico, for an undisclosed sum.
Doughty Hanson managed to make its money back on the off-market transaction, according to a spokesman for the firm.
The buyout firm acquired the company in February 2007 through its fifth fund, which closed the following April with commitments of €3 billion. This is the third sale from the fund, which has returned 65% of funded commitments to investors. There are a further five investments in the fund yet to sell, according to the statement.
Avanza had a turnover of €435 million in 2012, according to Doughty Hanson’s annual report. The business, which is the second largest bus operator in Spain, has completed six add-on acquisitions during Doughty Hanson’s ownership and did a €490 million bond issue in May this year. The bond issuance was made up of two tranches – €315 million worth of secured notes at 7.5% and a second tranche of €175 million worth of unsecured notes at 9.5%, according to the spokesman for Doughty Hanson.
JP Morgan advised the sellers on the transaction and Deutsche Bank advised the buyers on the deal.
The deal is an unusual one as acquisitions of private equity-backed businesses by Latin American buyers remain rare. This sale is the first financial sponsor trade exit with a Latin American buyer since 2011, according to data provider Dealogic.
But Latin American acquirers are looking beyond South America for M&A targets. Over the past few years outbound M&A has been increasing in both value and volume, according to data provider Mergermarket.
There have been 17 outbound M&A deals by Latin American acquirers of international businesses worth a total of $25.3 billion so far this year, according to Mergermarket. Last year there were 52 such deals worth a total of $16 billion, making it the highest full year in terms of both value and volume since 2006.