Vallis seeks to buy builders

Lisbon: Vallis Capital Partners, a Portuguese private equity company, is seeking to buy more construction companies after one of its funds bought three builders this year.

“We have a few more companies in our pipeline,” said Pedro Goncalves, who manages Luxembourg-based Vallis Construction Sector Consolidation GP Sarl, which has at least 300 million euros (Dh1.41 billion, $378 million) in funds. He declined to provide details about his fund’s targets or timing of possible deals.

The fund completed the purchase of Portuguese builders Grupo Hagen and Monte Adriano last week, Goncalves said. Vallis plans to merge the two companies with Grupo Edifer, another Portuguese company it acquired this year for an undisclosed amount.

The fund’s goal is to help companies counter a slump in Portugal’s construction sector by merging them and focusing on their foreign operations, said Goncalves. A total of 868 building companies went bankrupt in Portugal in the first seven months of the year, the Portuguese Construction and Public Works Industry Federation said on Aug. 28, amid a recession and as the government cuts back on spending to comply with the terms of a 78 billion-euro bailout.

“There are too many construction companies in Portugal and some won’t survive the current crisis,” said Goncalves. “Some need to merge to gain enough scale to expand abroad.”

Goncalves, a former chief executive officer of Grupo Soares da Costa SGPS SA, Portugal’s third-biggest building company in terms of market value, said he would become the CEO of the companies acquired by his fund.