“GAM will explore new lines of activity, such as events organization, and, in the field of energy, the building of aeolian parks” explained its C.E.O., Pedro Luis Fernández.
The Asturian firm is already carrying out some activities in this fields, but in a more residual manner. At this point around 80% of turnover comes from renting equipment to building companies of public works and housing construction (i.e. directly linked to construction), and this percentage should be decreased to 60% in a five-year period, through diversification.
Europe sets a trend. According to Mr. Fernández, “The big ones at European level have succeeded to get 20% of their sales from the assembly of large events”. In terms of investment GAM occupies the eighth position in the European ranking published by the English industry magazine European Rental News, owned by the KHL Group. Last year GAM moved 20 positions up in the ranking of corporations, reaching the 28th position.
It is a paradox that the contracts with large construction corporations amount only to 25% of turnover and medium and small size companies bring most part of turnover. This company was founded in 2003 after the merger of three organizations of this industry. The main share holders are the risk capital funds Dinamia and Nmás1, which have 80%, then 10% belongs to Cajastur and the remaining 10% belongs to GAM’s management team.
Last year GAM invoiced 87 million Euros, 40% more. This financial year GAM has 21.000 machines available for rent and 800 employees and the expected increase of sales is 35%, reaching 120 million Euros. Not counting acquisitions.
GAM explores opportunities in the domestic market, that is very fragmented. Before the end of this year, GAM expects to close an operation of 40 million euros. The latest operation has been the acquisition of J. Crespo, run by the Crespo family, with a cost of more than 10 million Euros. By owning the oldest firm in Madrid, GAM enhances its position in this region and acquires 1.100 machines for rent.
36 Branch offices
GAM has currently 36 branch offices in Spain and Lisbon, leaving the door open for expansion through new business centres in Catalonia, Canary Islands, Extremadura and Castille-La Mancha, altogether amounting to 10 branch offices.
According to Mr. Pedro Luis Fernández, “Portugal has a long way to go”, should the goals of the strategic plan be met, GAM would be able to double up its market share in 2008. GAM’s current share is 10%.
GAM is not ruling out a national merger
GAM admits there is a certain risk that a foreign corporation should decide to launch a tender offer over its capital. The threat of being taken over by a foreign group “does exist”, although it is no regarded as immediate. “Spain is the most appealing market in this business” asserted Mr. Pedro Luis Fernández, GAM’s C.E.O., who is not ruling out a possible integration operation with a Spanish corporation. At this point this could only be done with a similar group, such as, for instance, Euroloc. However, according to Mr. Fernández, no steps have been taken is such direction. GAM admits that there is a strong fragmentation in the Spanish market. |
