The digital photography group Hofmann goes shopping to Europe

2012/12/17

Just a year ago the sale of Hofmann , the photography group controlled by the Spanish private equity firm Portobello, was the talk of the private equity circles and it was expected to be one of the big deals of 2012. However, twelve months later the offers received by the ex-Ibersuizas partners haven’t encouraged any deals and therefore the private equity firm is already thinking on the best way to keep creating value. And opening the market in Central Europe by means of acquisitions seems to be the best solution.

Sources from Portobello have confirmed to this newspaper that the countries where Hofmann could go farther are France, Germany, Belgium and Holland. Specifically, expansion would be done by acquiring a local company in one of these countries to then expand to the other territories.

Portobello has chosen these markets as the digital albums’ business hasn’t been developed greatly and there are no big competitors, contrary to the USA, where Shutterfly has controlled the business for many years. In fact, the company has ruled out any kind of transaction in the US market.

Hofmann’s 2011 EBITDA was c.17 million and its market price could reach 150 million. A figure that, so far, no bidder is willing to offer.

Ibersuizas and Realza bought 80% de the digital photography group in 2009. Founded in 1923, the remaining 20% is held by the family that created the company, based in Valencia. However, following the exit of several partners from Ibersuizas to found Portobello, the investors chose to leave the management of this investment in hands of the new fund.

In addition to Hofmann, Portobello has another three investments which are considered mature. On the one hand, Angulas Aguinaga, where the fund has been present since 2006 (first through Ibersuizas) and whose stake is for sale. Laboratorios Indas and Festa, which only a few months ago avoided successfully the receivership’s process after agreeing a partial write-off with its creditors.

As for future deals, Portobello confirms that some investments are still possible as 10% of the second fund is available, around 25 million euro.

Portobello Capital holds at the moment a stake in 15 companies with around 450 million under management.

EL ECONOMISTA