Hiperbaric – Global leading manufacturer of High-Pressure Processing (“HPP”) equipment for the food industry, a niche market of high value-added industrial products with favourable growth prospects driven by rising concerns over food safety, clean label, eco-friendly and healthy products.

type Case Study; Former Investment

Date 2018 - 2023

Company at a Glance:

Founded in 1999 and headquartered in Burgos, Spain, Hiperbaric is the global leading manufacturer of High-Pressure Processing (“HPP”) equipment for the food industry, a technology that uses cold water (as opposed to traditional heat treatments) to safely pressurize and sanitize fresh foods and beverages resulting in products that are (i) free of chemicals and additives, (ii) minimally processed and (iii) with their organoleptic and nutritional properties intact. These processes extend product shelf life, helping to reduce food waste. The Company has a consolidated international presence with sales across more than 50 countries and 60% of global market share. Hiperbaric’s strong R&D commitment has allowed it to develop the recently launched green hydrogen compression vertical, a highly synergistic business that is set to contribute to sustainable mobility and industry decarbonization.

Origination and Investment Rationale:

Hiperbaric stemmed from a proprietary transaction, forged through a longstanding relationship between the Alantra PE team and key managers of the business. The Company was involved in a competitive sale process where the Founder and General Manager of Hiperbaric enjoyed a last refusal right to acquire the business vs. an alternative binding offer received from a strategic player. Alantra PE managed to position itself as anchor investor to complete the transaction thanks to the close relationship developed with the Founder, who acquired a minority stake.

The acquisition rationale was based on the following criteria:

    • Global market leader (c.60% market share) within a growing industrial / technology-based niche with highly attractive growth prospects (+15.7% CAGR17-24) based on: (i) an increasing demand for better food safety, (ii) retailer’s needs to increase product shelf life and reduce spoilage rate and (iii) raising demand for healthy, premium niche products
    • International reach (c.98% international sales) and well-established position in blue chip markets such as the US
    • Market (€524m size expected by 2024) fenced by relevant entry barriers derived from the engineering and R&D capabilities required to develop the equipment, with only two players dominating c.100% of the market worldwide
    • Integration with Desmasa’s HPP business allowing Hiperbaric to gain full control of the supply chain (secured access to critical components) and triggering significant synergies in terms of personnel and processes
    • Full alignment with management team who reinvested all their proceeds in the Company

Alantra Contribution and Value Creation:

a) Team enhancement and professionalization

    • Incorporation of new strategic positions through internal promotions and new hirings (new CFO, new Commercial and Applications Director role, new managers in the Mexico and Singapore subsidiaries and several reinforcements in the commercial and digital marketing areas)

b) Active top line management

    • Improved sales mix towards larger more profitable machines with a higher associated price tag
    • Growth of the highly profitable Maintenance and Repair Parts business line on the back of ever-growing installed base of equipment
    • Opening of two commercial branches in Mexico and Singapore
    • Pricing management resulting in a successful pass-through of costs inflation

c) New product development through strong R&D focus:

    • Food related: Development and launch of HB 1,050 bulk, the only equipment capable of processing liquids on a continuous basis, allowing Hiperbaric to increase its addressable market within the food industry
    • Non-food related:
      • New Green Hydrogen Compression (GH2C) Business Line driven by strong technological synergies and the unparalleled growth expectations of the H2 market
      • Hot Isostatic Pressing (HIP) development, a technology used to densify metal and ceramic parts applying high levels of pressure and temperature in order to give them excellent mechanical properties

d) Operational improvement:

    • Hiperbaric’s vertically integrated model together with good sourcing and supplier diversification management resulted in a reduced exposure to volatility of raw materials, a diversified supplier base increasing Hiperbaric’s bargaining power, and the use of special high-pressure resistant iron with steadier prices than standard steel
    • Strict control of indirect Opex and overhead costs
    • Sound Working Capital management including inventory management and customer collection procedures
    • Well-invested Company with new premises developed shortly before Alantra PE’s entry and cumulative Capex of only €5.4m in the 2018/22 period

About the Exit:

Hiperbaric’s exit was executed by means of an MBO where the Company’s founding and management team became the majority shareholder thus accomplishing its roadmap towards the takeover of the business initiated in 2018 through the acquisition of a minority position. The new ownership composition included institutional investors, family offices and industrial investors. During Alantra’s ownership period, numerous actions led to solid EBITDA growth, business deleverage through excellent cash generation and attractive exit multiples while laying the foundations for the Company’s subsequent growth stage. Given the excellent market forecasts and the strong development potential of the green H2 compression vertical, Alantra PE has reinvested in the Company through its new PEF IV vehicle.

The case studies herein are not necessarily representative of the investments made by Alantra Private Equity as a whole and have been included merely for purposes of illustrating the operational and value adding capabilities of Alantra Private Equity. The case studies have not been included to exemplify the quality or performance of any particular investment or for any other purpose.