MADRID (TheStreet) -- One of the biggest drivers behind Spain's economic recovery has been its food industry. And not surprisingly, yield-hungry investment funds from the U.S. and elsewhere have been adding Spanish food companies to their portfolios.
The Spanish food industry is the country's biggest economic sector, contributing 2.7% of GDP, according to the FIAB, the country's food and beverage industry association. Revenue totaled $80.4 billion last year, with production increasing 2.6% from a year earlier, the best result since 2005.
That's drawn the attention of some big funds.
In December, British investment fund CVC paid $246.5 million to acquire 48% of Deoleo, one of the world largest olive oil producers.
Last year, Miami-based HIG capital created Compania del Tropico, the holding company of Cafe&Te and Panaria, two coffee and bakery chains which in turn control seven more brands.
Kohlberg Kravis Roberts (KKR) led a group of funds that invested $227 million in pizza delivery firm Telepizza, while Oaktree Capital Group (OAK) raised its stake in bakery firm Panrico to 100% from 86% in 2013.
In February, Carlyle Group (CG) acquired Palacios Alimentacion, a manufacturer and distributor of Spanish specialty food, for an undisclosed amount. The fund specified on its website the importance of Palacios' business outside Spain, where the company "generates 25% of its revenue ... and is present in more than 30 countries, including Portugal, France and the UK."
Data elaborated by the Valencian Institute of Economic Research show Spanish food exports increased by 5.5% in 2014, with the gains focused in the U.S., China, U.K., Japan and Southeast Asia. Sales to these countries generated a $4.7 billion income last year, with foreign demand growing at a higher rate than domestic one.