Advent International has made private equity commitments in the past several weeks to two Spanish companies on opposite ends of the private equity opinion scales.
Earlier this month, the firm led a GBP20 million investment in Alcala Farma, a Spanish developer and manufacturer of pharmaceuticals that Advent managing director John Singer said has seized on regulatory changes in order to capitalize on the generic drug market.
Separately, Advent led a $12 million equity investment in Espaol.com, an e-commerce site for Spanish speakers.
Dresdner Kleinwort Benson Private Equity introduced Alcala Farma, a preferred equity deal, to Advent, and committed 25% of the total capital, with Boston-based Advent investing the balance. Singer said the two investors now hold a 40% stake in Alcala Farma.
Spanish Drug Opportunities
“At the moment there are a lot of opportunities occurring in Southern Europe because of the current regulation environment,” Singer said.
Spun out from Glaxo Wellcome in 1995, Alcala Farma has established a beachhead in licensed products through third party manufacturing for big pharmaceutical companies such as SmithKline Beecham and Rhone Poulenc. The company has also made inroads in the generic product sector as well as women’s health-care products.
Proceeds from the offering will serve as working capital that will enable the firm to introduce a variety of services to the opening market.
“It is time to come in with [Alcala’s] production capabilities, management and distribution,” Singer said. “They have contracts with one-fifth of the pharmacists in Spain.”
Advent’s $2 million Espaol.com investment was the largest single commitment, with other investments coming from Grupo Ferre Rangel, the publishers of Puerto Rico’s El Nuevo Dia, Advent-Morro Equity Partners, an affiliate of Advent International, partners from the advisory firm Violy Byorum, and venture capital firms Masthead Venture Partners, Cornerstone Equities and Beacon Investment.
Marcia Hooper, a partner at Advent, said this investment joins a list of approximately 30 investments that Advent has made in Internet-related companies in the last five years. She added however, that Espaol.com taps into a relatively untouched market-more than 392 million Spanish-speakers who prefer to shop in a language-specific and culturally sensitive environment.
Hooper said the capital infusion will enable Espaol.com to launch a marketing campaign with print, radio and television advertisements that will first target the U.S. and Mexico then move into Puerto Rico, Latin America and Spain. The capital also will help Espaol.com fund additional research and development and attract and retain top talent for the company.
Espaol.com is the first large-scale e-commerce site for Spanish speakers and was the first Spanish-language Internet site certified by the Better Business Bureau On-line. It offers books, music, videos, jewelry and religious items in Spanish and will be expanding its product offering to include electronics, sporting goods, fragrances and cosmetics.
The company was established last year and launched its site last month.