OpenGate Capital has sold Getronics LATAM, an ICT products and services provider for the large enterprise market. The buyer is Southern Cross Group, a Latin American private investment firm. No financial terms were disclosed. KPMG Corporate Finance LLC provided financial advice to OpenGate on the transaction.
LOS ANGELES–(BUSINESS WIRE)–OpenGate Capital, a global private equity firm, announced today it has completed the sale of Getronics LATAM to Southern Cross Group, a leading Latin American private investment firm. The exit yields greater than 11 times invested capital for OpenGate Capital. Financial terms of the transaction were not disclosed.
Getronics LATAM, with operations in Mexico, Colombia, Peru and Venezuela, is an integrated ICT products and services provider for the large enterprise market including workspace management services, connectivity, data centers and consultancy services.
OpenGate Capital first entered the Latin American market in 2010 through its acquisition of Sopho, a Brazilian IT services company, from Philips. As a strategic add-on, OpenGate Capital then acquired Getronics LATAM from KPN in 2012 to bring greater scale and operating strength across Brazil, Mexico and Colombia. The third phase of OpenGate Capital’s buy and build strategy was the acquisition of Damovo Latin American in 2014 from Damovo Europe. This acquisition added scale, operational capabilities and blue chip customers in Mexico and Brazil. All three acquisitions were made through OpenGate Capital’s legacy, pre-fund investment platform.
Throughout the investment period, OpenGate Capital and Getronics LATAM implemented several strategies to improve the overall value of the business including the following:
Cost savings initiatives
Accelerated growth in existing geographies and expanded into new geographies
Improved cross-selling product and services opportunities across a pan Latin American group
Divested the Brazil operations in January of 2016 to CimCorp
During OpenGate Capital’s ownership period and as a result of these strategies, there has been an increase in revenues of over 11 times and an increase in EBITDA of over five times and OpenGate Capital returned over 11 times its invested capital.
Andrew Nikou, OpenGate Capital’s founder, Managing Partner and CEO stated, “I am incredibly proud of our investment in Getronics LATAM and the value we created through our operational turnaround and accretive add-on efforts. Under our stewardship, we increased the value of the platform, doubling the EBITDA performance of Getronics. While the Latin American market was challenging, it did not deter us from pursuing what we believed would be a great investment. Through our strategy of working with local management teams and building a deeper understanding of each market’s particular dynamics, we successfully achieved our objectives. As Getronics LATAM transfers to Southern Cross Group we are confident that together they will continue on a path of growth.”
Leading the transaction on behalf of OpenGate Capital was Matthias Gundlach, Senior Principal in the firm’s Los Angeles office, who said, “As far back as 2010, OpenGate Capital saw tremendous potential in a business and a market that many other buyers shied away from given the complexities of integrating and operating a business in several counties. OpenGate built a team on the ground in Brazil and applied its turnaround and add-on acquisition strategies to drive value into the Getronics LATAM business. The sale of the business reflects the results of our efforts and today, Getronics LATAM is well positioned for growth under the ownership of Southern Cross Group given their deep domain knowledge in both the IT services industry and the Latin American market. We thank the team at Southern Cross and Getronics for their support throughout the transaction period.”
OpenGate’s Advisors on the transaction included KPMG Corporate Finance LLC as financial advisor, Morgan, Lewis & Bockius LLP as lead legal counsel, and KPMG LLP as lead tax advisor.
The sale of Getronics LATAM represents the sixth transaction in 2016 for OpenGate Capital following the firm’s acquisitions of Power Partners Inc, Bois et Matériaux, Energi Fenestration Solutions, Alfatherm and EverZinc, each of which was made through its first, private equity institutional fund.
About OpenGate Capital
OpenGate Capital is a global private equity firm specializing in the acquisition and operation of businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and has a European office in Paris, France. OpenGate’s professionals possess the critical skills needed to acquire, transition, operate and build successful businesses. To date, OpenGate Capital, through its legacy and fund investments, has executed more than 30 acquisitions ranging from corporate divestitures to turnaround acquisitions, industry consolidations and other special-situation investments. To learn more about OpenGate, please visit www.opengatecapital.com.
About Southern Cross Group
Southern Cross Group is a leading Latin America private investment firm. Southern Cross Group’s philosophy is to invest in Latin American companies who own assets that, when deployed with a focused strategy, led by an outstanding management team and unburdened with inappropriate capital structures, will seek to achieve a sustainable competitive advantage in their markets.