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Advent Acquires Majority Stake in GMD for US$84.7m

6 June 2017

Advent International purchased a majority stake in Peruvian IT service firm GMD for US$84.7m from Graña y Montero.

(Press Release) Graña y Montero S.A.A. (NYSE:GRAM) (BVL:GRAMONC1) ( “the Group” or “Graña y Montero”), a leading engineering and construction company, today announced that it has closed the sale of its stake in GMD, a subsidiary of the Group specialized in information technology and telecommunications, to Advent International (“Advent”), one of the largest and most experienced global private equity investors.

Advent is acquiring the Group’s majority ownership stake in GMD for US$84.7 million, with an initial payment of US$37.3 million and subsequent payments subject to milestones agreed between the parties. The agreed price is equivalent to 8.2 times GMD’s 2016 EBITDA. The Group decided to divest GMD after a thorough analysis of the future business strategy, which will focus on the areas of engineering and construction, infrastructure and real estate, where it has extensive experience.

GMD has been part of the Graña y Montero Group for more than 30 years. The company was founded in 1984, and has more than three decades of experience developing and successfully implementing IT solutions that generate value to the business processes of its clients. After years of competing with large multinationals, GMD has emerged as the leading Peruvian IT services firm. Luis Diaz Olivero, Chief Executive Officer of Graña y Montero, affirmed that Advent is a leading global private equity firm. It has a strong investment history in the technology sector and is the right shareholder to drive growth and create value in GMD. “We believe Advent is a strong candidate to acquire the company because it has the resources to capitalize on GMD’s capabilities and maximize its future growth potential.”

In addition, Adolfo Vinatea, Director of Advent in Peru, emphasized that GMD is a leading company with a wide range of experience in outsourcing services and information technology. “GMD is the largest local player in the fragmented, but fast growing IT services market in Peru. This acquisition presents an opportunity to build a regional, integrated IT outsourcer in the Andean region and we are very excited to partner with GMD’s experienced management team and help accelerate the current value creation processes.”

Moreover, Diaz said that with this transaction, Graña y Montero has reached an amount close to US$193 million in asset sales. “This transaction best positions the company to accelerate debt reduction and focus on financial strengthening, particularly, after the termination of the Peruvian
Southern Gas Pipeline contract”, he concluded.

Advent has been investing in the technology, media and telecom (TMT) sector for over 26 years, completing more than 70 investments in 24 countries. Recent TMT investments in the US and Europe include CCC Information Services, a provider of software and workflow tools to property & casualty insurers and automotive collision repair shops; Nets (Nasdaq, Copenhagen: NETS), one of Europe’s largest providers of payment, information and digital identity solutions; Unit4, a global provider of enterprise resource planning software; P2 Energy Solutions, a leading provider of software, geospatial data and land management tools to the upstream oil and gas industry; and KMD, one of Denmark’s leading IT services companies.

Advent was advised by Capia and Garrigues for this transaction, while Graña y Montero was advised by Estudio Muñiz.