MADRID: Florentino Pérez is widely known as the most-successful chairman of Real Madrid, the football club with the greatest number of Champions League wins in Europe – in spite of some recent disappointments.
But not too many outside Spain know the 79-year-old is also the founder, chairman and top shareholder of a construction company that’s now among the biggest winners of the artificial intelligence (AI) boom.
With a contract to help build one of the world’s largest data centres (DCs) for Meta Platforms Inc in Indiana, with a footprint that could cover much of Manhattan, and a contract with BlackRock Inc for similar projects, ACS SA’s stock has skyrocketed.
That has swelled Pérez’s coffers, with his 14% stake giving him a net worth of US$6.6bil according to the Bloomberg Billionaires Index.
It has put him on the cusp of breaking into the world’s 500 biggest fortunes for the first time, alongside such compatriots as Mercadona SA’s Juan Roig and Zara founder Amancio Ortega.
ACS owns engineering firm Turner Construction Co, a leading DC builder in the United States, giving it a front-row seat in the frenzied rush to build AI infrastructure.
As investors separate hype from reality in the AI universe, ACS’ role as a provider of physical infrastructure to the digital industry’s hyper-scalers is cementing its place.
It has joined European rivals like France’s Bouygues and Sweden’s Skanska to tap a rich vein in the digital infrastructure market that was valued at about US$439bil last year and is set to more than triple to US$1.38 trillion by 2030.
“Our view is that the world is on the verge of a wave of infrastructure reconstruction as was seen in the 1970s and 1980s,” ACS chief executive officer Juan Santamaría told Bloomberg News.
“It’s a real opportunity.”
Santamaría, who has never granted an interview since he was by handpicked by Pérez for the job in 2022, has been instrumental in ACS’ stellar rise.
Pérez has had a long track record of picking winners at Real Madrid, which he has run since 2000 – except for a three-year break.
He transformed the football club into one of the most valuable sports brand.
Although Real Madrid lost in the Champions League quarter-final in April and the Spanish league title this month, the septuagenarian remains the most successful president in the club’s history, with 37 titles on his watch.
Pérez is as obsessively results-focused at ACS as he is on the football field.
The tycoon identified Santamaría, a civil engineer in his mid-40s who had spent most of his career working for ACS units outside Spain, as someone who could take the company to a new level of growth by modernising it and making it operate more as a global corporation than a string of disparate units, according to several people familiar with the group’s management.
The move turned an old-school industrial company into a growth stock.
“Typically, you can’t find a lot of growth opportunities in the infrastructure space, but ACS provides a growth opportunity among peers, especially with the data center announcements,” said Robert Yan, a portfolio manager at High Street Asset Management, which holds ACS shares.
For years, ACS, a multinational behemoth, kept a low profile, shunning the glamour and bright lights of Silicon Valley.
Its board – which has among the oldest members in the Stoxx 600 index – ensured the company was just a steady player in its industry with its local units across the globe serving their individual markets.
That was reflected in its stock performance. For almost a decade before 2022, the company’s stock treaded water, stuck in the 20 to 40 range.
Since 2022, it has skyrocketed more than five-fold to hit a record high this month of 140.4 (US$162.9).
Santamaría’s mandate at ACS was clear: take the array of local companies – ranging from mine management and engineering in Australia to waste management in Spain and toll roads in the United States – and create a truly global player.
Soon after he was named, Santarmaría gathered executives from across the globe in Essen, Germany, to identify a group of verticals with the potential for growth.
He zeroed in on digitalisation, defence, energy and mining of critical minerals.
In addition to DCs, the company’s tech projects under development include building semiconductor factories in the United States.
It is also participating in the construction of small nuclear plants and taking part in Vulcan, Europe’s largest lithium development. That has given the company clients like Rolls Royce and Hitachi.
“ACS is in all the right places at the right time,” said Graham Hunt, an analyst at Jefferies.
“The stock has left everybody behind, and while that’s common among AI stories, such stories in the infrastructure space are quite uncommon.”
The group began transforming itself, entering new markets and creating international supply chains and a stockpile of critical materials.
It broadened its offering, winning clients that had not been on its radar before. At Rolls Royce for instance, ACS won contracts not just for construction but also for retrofitting and dismantling nuclear plants.
“We had to bolster our construction capabilities with engineering to be able to contribute across the value chain,” Santamaría said.
What has fuelled ACS’ growth is a rapidly digitising world, geopolitical turmoil that’s boosting defence spending and a search for cleaner energy sources.
Its revenue has almost doubled from 27.8bil in 2021 to 49.9bil last year.
Now, after some years of building DCs for clients, ACS is moving into development and ownership – in line with what it has done in other sectors historically of building and owning concessions.
“The company’s record 99.8bill backlog, up 16.1% on an foreign exchange-adjusted comparable basis, supports two years of visibility,” Bloomberg Intelligence analyst Kevin Kouam wrote in a note following ACS’ strong first-quarter results this month.
Those orders prompted the company to sell shares this week to raise about 2.1bil to fund DCs and other AI-related infrastructure.
Little of this could have been predicted when in the early 80s Pérez, an engineer by training, left a civil service career and bought a near-defunct builder.
With a declared passion for politics, something he couldn’t build a career in, Pérez over the years acquired a series of other failed or struggling companies and used them to build the consortium now known as ACS.
Like many other Spanish engineering tycoons, Pérez’s business benefitted from the modernisation of Spain following its entry into the European Union in 1986 and the record spending on infrastructure over the ensuing decades. But like many others, when the 2008 financial crisis hit, ACS found its viability at risk.
To protect itself, ACS expanded abroad and in 2011 decided to acquire Hochtief, a publicly-listed German builder in which it had owned a minority stake since 2007.
Hochtief’s management fought back for months before giving in. With Hochtief, ACS became the owner of Turner in the US and Cemic in Australia.
Pérez, who is ACS’ top shareholder, is deeply involved in the company’s operations and heads its weekly management meetings.
Criteria Caixa, Spain’s biggest investment group, bought a 10% stake in ACS last year to become the company’s second-largest holder.
Criteria was looking to diversify its portfolio and Pérez approached its chief, an 83-year-old banker named Isidro Fainé.
ACS’ third-largest investor, with 5%, is a holding company for Alberto Alcocer and Alberto Cortina, two Spanish businessmen who have been acquaintances of Pérez’s since the 70s, from his time as a government worker. — Bloomberg
