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Spanish facility services company

Acquisition of a majority stake in GENERA QUATRO by GRUPO GIMENO to take advantage of the synergies and to grow in the maintenance services division within the Group THE VECTOR COMPANY advised GENERA QUATRO in this transaction

General Overview

GENERA QUATRO is a Spanish company with 15 years of experience in providing comprehensive maintenance services, specialized in air conditioning, heating, industrial cooling and hot water installations.

The company offices were located in Madrid and Valencia, but with branches in Barcelona, Seville and Alicante to cover its operations, with a total staff of approximately 250 employees.

The company benefited from the highest qualifications to operate around Spain and mainly in the public sector. During the last years the Company had been showing a double-digit growth in sales because of an strategy for covering the business from a national level perspective.

Strategic Rationale

The company had been fastly growing in its core business, mainly with public clients, so the Company was forced to finance the working capital increase coming from the growth and the increase in the DSO. This situation result on the convenience of increasing the capital in the company to finance the growth of the business-

On the other hand, the shareholders and managers of the Company had driven the company to a relevant sales level so achieving a higher stage required other management practices and a stronger business organization.

The integration of the company into GIMENO GROUP, a highly structured professional organization with a turnover of more than EUR 300m euros and a staff of more than 4,500 employees, would allow the company to move faster and would allow the management team to be more focused on the commercial activities and the operations for executing the contracts instead than in the organizational tasks to adapt the business structure to the growing business.

On the other hand, GIMENO GROUP was expanding its service portfolio with a player very specialized in different maintenance services that the group could improve.

Key learnings

Businesses based on medium-term contracts with clients need to be understandable in specific items (e.g. part of the business based on a stable revenue with an adjusted return that coexist with part of the business based on special activities to be executed within the contract and during the contract period with a higher results; there is a need of having a complete cost system in businesses with adjusted returns and contracts that always have some particularities to be managed).

The importance of capitalizing companies when they have to face an ambitious growth plan.

In sectors where the main competitors are large companies it is quite normal to end up partnering with one of them to keep the competitiveness.