JZ Capital sells Factor Energia – JZ Capital Partners Limited has sold, at net asset value , its majority equity interest in Factor Energia S.A., which was held through its
EuroMicrocap Fund 2010, L.P. The transaction enterprise value was approximately EUR120 million.
Factor is being acquired by a public-sector asset manager, on behalf of a major Canadian pension fund. As part of this transaction, JZI Fund III L.P., in which JZCP is an approximately 18.8% limited partner, has agreed to invest EUR20 million alongside the majority owner and Factor management, representing approximately 25% of the business’ fully diluted equity ownership.
Founded in 1999, Factor is a leading independent supplier of electricity to small and mid-sized companies in Spain. Taking advantage of distressed valuations at the height of the financial crisis, JZCP entered the Spanish market through its investment in Factor in July 2010 and has since worked with Factor’s Founder and CEO, Emilio Rousaud, to significantly scale the business.
Supported by the deregulation of Spain’s electricity supply market and the recovery of the domestic economy, Factor has experienced a period of significant transformation under JZCP’s ownership, growing its customer base from approximately 4,000 to 45,000 and reported revenues from approximately EUR68 million to more than EUR370 million.
JZCP invested a total of approximately EUR7.6 million in Factor and is expected to receive total gross proceeds (before carry) of approximately EUR69.7 million from the sale (including deferred payments and interim distributions received over the course of the investment), representing a gross multiple of invested capital of approximately 9.2x and a gross internal rate of return (“IRR”) of approximately 42.3%.
Across the six Spanish portfolio companies it has sold to date (including Factor), JZCP has realized approximately EUR144.9 million on an investment of approximately EUR60 million. These six transactions represent a gross multiple of 2.4x and a gross IRR of 23.2%. JZCP is still highly committed to the Spanish region, holding four Spanish portfolio companies which continue to perform in line with expectations.
David Zalaznick, JZCP’s Founder and Investment Adviser, commented: “We’re delighted to announce the successful realization of Factor Energia. As we continue to focus on narrowing the discount to NAV at which JZCP’s ordinary shares trade, our ongoing ability to realize key assets at NAV further validates the true value of the company’s portfolio. We are excited about Factor’s future and the next chapter of its history.”
“We continue to see exciting micro-cap investment opportunities in Spain and look forward to deploying further capital in the region.”
Miguel Rueda, Senior Partner of JZAI’s London office, commented: “A lot has been achieved over the seven years we have owned Factor Energia. During this time, we have strengthened the company’s market position and grown revenues and profits substantially. We believe Factor still has considerable upside potential and look forward to continue working closely with management via our minority investment in Factor”
JZCP : JZ Capital sells Factor Energia