Palaces has announced the purchase of two companies: the US-based Elore Holding known for its "Quijote" brand, which is a leading distributor of Spanish sausages in the US and abroad. Fuentetaja, which operates in the tortilla and frozen foods market.
The total amount paid for the two companies is around €75M and it is expected that the group will be able to increase turnover and have a stronger international presence. With the new additions, Palacios' sales are expected to exceed €200M and EBITDA is expected to reach €30M.
These figures will be a significant leap from the group's pre-Carlyle figures, when revenues were around €150m and EBITDA was €18m.
Diversification was already one of Palacios' commitments before Carlyle became a shareholder. Since 2012, Palacios has made acquisitions to diversify its portfolio, buying Alinaco, the Spanish market leader in frozen tortillas, Dealsa, in frozen pizzas, and Graderroble in the pastry sector. With this new purchase of Fuentecaja, which is also in the frozen tortilla sector, Palacios is once again committed to diversification.
The internationalisation factor has weighed heavily in the transaction, especially -but not only- in the case of the Quijote deal. Palacios already had a distribution agreement with this Florida-based company through which it sold some of its products in the US. But now, with the purchase, the Riojan group has its own platform in the country from which to intensify its position in the North American market. To date, turnover abroad (USA and Europe) represented 20% of Palacios' sales. With the integration of Quijote and Fuentetaja, this share will rise to more than 25%.
Founded more than 25 years ago, Fuentetaja is a family business with a long history and a turnover of around €40M. Currently, 30% of the business is exported, although the family's intention is to increase this figure to 70%. In fact, it already distributes its products to a large part of Europe, as well as Russia, the United States, Canada, Mexico and Kuwait, among others.
Elore Holdings, which markets its products under the Quijote brand and is located in Florida. This firm produces meat derivatives for the US and Mexico and imports other products that it also markets.
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