Company at a Glance:
EYSA is specialized in urban mobility solutions for city councils, mainly offering services in on-street parking & off-street car park, towing and sanctions management through contracts of concessional nature. EYSA is the 2nd largest operator on the on-streetcar market in Spain with 25% market share in its core market, managing more than 150k parking spots in more than 67 Spanish cities.
Origination and Investment Rationale:
FCC initiated a limited auction to dispose its subsidiary EYSA in 2011. Alantra PE became the sole financial buyer involved in the process, securing a proprietary position by building a strong relationship with the management team. In addition, Alantra Group institutional support helped to secure financing in a tough market environment, providing credibility in delivering the deal to FCC.
The acquisition rationale was based on the following criteria:
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- Strong platform with a robust business in a stable market with high barriers of entry
- Leading position in the regulated on-street parking space segment
- The business’ concessional nature allows for high visibility of future cash flows and provides significant deleveraging capacity
- Scalable business model with strong organic and M&A growth potential in Spain and internationally
Alantra Contribution and Value Creation:
a) Management Build-up and Upgrade
EYSA’s manager became a non-executive chairman after Alantra PE’s investment and a new CEO was hired to lead the company in the carve out process of FCC. Under this new regime, new positions were created such as internal legal counsel, controller to support the existing CFO and business development director to complete management team. Moreover, a new Country Head was hired to open EYSA’s activities in Mexico.
b) Operational Improvements and Organic Growth
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- Carve-out from FCC, building best practice of stand-alone company
- Renegotiation of all key contracts with suppliers and staff optimization at concession level
- Successfully renewed the concession for key Madrid districts for a period of 12+2 years
- Improvement of the average duration of the concessions portfolio
- Special focus on collection process redesigned by Alantra PE
- Strong deleveraging, which enabled to carry out a dividend recap with an innovative structure (MARF)
c) Internationalization and Exports
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- Growth initiative to internationalize the business were focused in the US and LatAm
- Concept of bundled services became exportable
- International expansion in Mexico with two contracts awarded
- New tenders and Private Finance Initiatives launched in Brazil, Colombia, Peru and Panama
- Laid foundation for contract tenders in the US through subsidiary
d) Strategic Add-ons and Expansion
The acquisition of SCI, a Spanish company specialized in tax collection and sanctions management for municipalities, allowed to increase the service offering, as well as complement its geographical footprint in the Spanish market, gaining access to additional 54 contracts in 40 cities and providing substantial cross-sell opportunities.
About the Exit:
At the end of our four-year holding period, EYSA was sold to a financial sponsor. By that time, the company had expanded operations and increased average duration of its concessions portfolio, hence becoming an attractive asset.