Bill Gates has purchased a €113.5 million stake in Spanish construction firm FCC (Fomento de Construcciones & Contratas SA), giving its share price an 11% boost to €17.55 today. Gates is now the second-largest shareholder with 6% of the company, the AFP reports. FCC shares were up more than 5% on Monday, signaling that other investors may have detected Gates’ large acquisition (such purchases can be difficult to hide).

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FCC is diversifying away from the Spanish market

FCC is diversifying away from the Spanish market, building three metro lines in Riyadh for €6 billion, another metro line in Panama, and rebuilding the Gerald Desmond Bridge in LA.

The company seems like an ideal value buy. Its stock price dropped after a fully-owned subsidiary collapsed, costing the firm more than €600 million. Even though it was a massive loss and people already invested took a big hit, it’s also a one-time loss that leaves the rest of the company intact and possibly undervalued. With the Spanish economy starting to recover, it could see domestic profits grow alongside international ones over the next few years.

Bill Gates decision to buy into Spain is similar to Watsa

In some ways, Gates’ decision to buy into Spain is similar to Watsa and others’ decision to buy into Greece. Both countries are probably coming out of a very deep recession, and the European Central Bank has made it clear that it won’t allow sovereign debt to unravel, at least in the next few years. We will probably see the hunt for underpriced companies in southern Europe that are positioned to take advantage of the recovery heat up even more over the next few quarters.

FCC is also trying to refinance up to €5 billion in loans, reports Esteban Duarte and Manuel Baigorri for Bloomberg. It is seeking to convert as much as €1.5 billion into payment-in-kind debt. PIK debt allows borrowers to pay everything, including interest, when the debt comes due. They’re normally considered to be a higher risk debt product and carry higher interest rates than normal loans, but refinancing with PIKs puts less pressure on cash flow so that a company can take on profitable projects. The negotiations are private so no official details have been released.