Catalan company HD Covalco has acquired a 75% stake in Madrid-based Cash Diplo – a move that will boost the former's position as a leading player in Spain's wholesale food distribution sector.
The acquisition, pending approval from the National Commission of Markets and Competition (CNMC), will increase Covalco's turnover by nearly 30%, bringing the company closer to its goal of reaching €1 billion in revenue by 2025.
The deal, whose value has not been revealed, signifies a major step forward for Covalco, which previously attempted to secure leadership in the wholesale market by acquiring GM Food in 2019, a deal ultimately won by Swiss giant Coop through its Transgourmet division.
Cash Diplo – formerly part of the Supersol chain controlled by Lithuania's Maxima Group, and now managed by a group of its executives – boasts €210 million in annual turnover and a strong presence in the Canary Islands, central Spain, and Andalusia.
The company operates 40 stores, including cash and carry and supermarkets.
Cash Diplo
Covalco plans to retain the Cash Diplo brand and its current management team, led by Luis Gil Mazón, who will retain a 25% stake in the company.
The acquisition will strengthen Covalco's national presence, expanding its network to 180 cash-and-carry centres and introducing it to the Canary Islands market.
Covalco aims to leverage its existing resources and strong financial position to achieve an EBITDA of €55 million by 2024, with a target of a 5.5% EBITDA margin.
HD Covalco concluded its most recent fiscal year in January 2023, achieving a €670-million turnover, of which 75% was generated by its cash-and-carry centres and wholesale supply to franchised stores.
The remaining 25% originated from its retail division, operating under brands like Coaliment Compra Saludable, Comerco, Trady's, and Comarket. The company's EBITDA for the year amounted to €40 million.
