France-based Schneider Electric has agreed to acquire Brazil’s Steck da Amazonia Industria Electrica. Steck, with estimated sales of BRL180m ($116m) for 2011, manufacturers industrial plugs, contactors, circuit breakers and other electrical systems. Schneider declines to comment on the price of the deal, which advisors it retained, or its financing plans. The deal is expected to be accretive to earnings from year one.
Yearly Archives: 2011
Posted inDaily Brief
Investors Talk Pricing On Elektra
Investors are heard seeking a 7%-8% yield on Mexican retailer Grupo Elektra’s new benchmark-size RegS 7-year NC4 bond. The buyside is taking Grupo Famsa, another Mexican retailer, as the principal comp, although its $200m of 11% 2015 NC3s carry a shorter tenor and are rated B/B+ by Fitch and S&P, a notch below Elektra. Those bonds were priced last year at 99.063 to yield 11.25%, but were trading Friday in the 8% area. Sister company TV Azteca, rated BB minus, is seen as another possible comp despite the difference in sector. The Mexican TV concern sold $300m of RegS only 2018 bonds earlier this year with a 7.50% coupon to yield 7.75% and the bonds were trading at 7.12%-6.92% Friday. Still, accounts have expressed some concerns about transparency on the Elektra deal given its RegS only format and a solitary BB rating by Fitch. The company is also part of the holdings of Ricardo Salinas who has courted his fair share of controversy in recent years after being investigated by the SEC and de-listing Grupo Azteca in the US. The borrower is continuing its global roadshow in New York, London, Singapore and Hong Kong early this week with leads BCP, Jefferies and UBS. Elektra is tapping the international markets after an over 10-year absence. It last issued a foreign bond in 2000 when it priced a $275m 8-year NC4 at par to yield 12% through Warburg Dillon Read. At the time, the company was rated B2/B.
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Midas Medici Buys Brazil BPO
US-based Midas Medici has acquired Brazilian BPO and IT integrator CIMCORP. The acquisition is subject to closing conditions and financing arrangements, but the transaction is expected to be wrapped up before the end of July 2011. Payment consists of a combination of cash and Midas Medici stock, Midas CFO Johnson Kachidza tells LatinFinance, who declines to disclose the ratio between the two. Midas is not disclosing the deal’s value, although acquisitions in the sector tend to be valued around 1x revenues. CIMCORP has over $85m in annual revenues. State Capital is advising CIMCORP, while Midas is not using an advisor, Kachidza says. The company is financing the deal with funds raised from previous private placements, and is also considering additional equity raises.
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Sanepar Places BNDES Credit
Companhia de Saneamento do Parana (Sanepar) has placed BRL395m ($252.23m) in debentures with Brazilian development bank BNDES as it moves to cover a BRL464m capex plan. The 2024 bonds are divided into three series. A BRL158m tranche pays the long-term interest rate TJLP+1.92%, and amortizes monthly from Sept 2014. A BRL118.5m tranche, meanwhile, pays the consumer price index IPCA+1.92% and amortizes annually from 2015. Proceeds will fund a plan to upgrade water treatment systems serving 99 cities, which is also being financed by BRL69m of Sanepar’s own resources. Sanepar is rated A3 on a national scale.
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UVA Extends Roadshows
Brazilian sugar and ethanol producer Usina Vista Alegre (UVA) has extended roadshows by another day as it continues to move forward with a $150m-$200m 7-year NC4. The borrower had been expected to wrap up marketing in Los Angeles last Thursday but was still meeting with accounts as of late Friday. Preliminary guidance has been at 11% area, with pricing expected this week. However, some investors have voiced concerns over UVA’s 5.3x debt-to-Ebitdar ratio and tight liquidity. “There are other [EM credits] offering the same coupon with a cleaner balance sheet,” says a non-participating investor. The sugarcane grower/sugar and ethanol producer is rated B minus/B3 and is coming to market through BTG Pactual.
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DomRep Builds $3bn Book
The Dominican Republic retapped its 7.50% 2021s for another $500m Thursday after the infrequent issuer saw its order book climb to $3bn in what was a positive day for the broader markets. Investors certainly liked what was seen as a 27bp concession after the release of low 7% area guidance, and they largely stayed on board even after the sovereign reduced that to a skinny 7bp when it launched at 6.95%. The B1/B +/B credit was heard favoring a tap of the 21s over the 27s simply because investor appetite was stronger at that part of the curve. “The deal was extremely strong,” notes Gregory Fischer, managing director at Oppenheimer. He says leads Barclays and JPMorgan picked the right day to bring DomRep given how optimism over US debt talks and news of a Greek bail-out plan sent markets higher Thursday. The 21s were trading at 104.60-105.10 in the secondary Thursday afternoon against a reopening price of 103.545. The sovereign was last in the market in May last year when it first issued the 2021s through Barclays and Citi, pricing them at par to yield 7.50%.
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First Pre-Salt FPSO Loans Close
About $2bn worth of loan facilities have been closed over the last month to finance the construction of the first floating production, storage and offloading vessels (FPSOs) that will be used in Brazil’s offshore pre-salt oil fields. Most recently SBM Offshore, Queiroz Galvao, NYK and Itochu secured $1bn through a facility that pays 130bp-200bp over Libor during the life of the loan and offered a tenor of 10 years plus construction. Bookrunners and MLAs were ABN Amro, DNB-Nor, Mizuho, Natixis, SMBC, Standard Chartered, with ING acting as coordinator. Bank of Tokyo Mitsubishi and Rabobank were facility and documentation agents, respectively. Other MLAs were CIC, DBJ and Nordea. Bookruners were heard coming in with tickets of $100m plus, while MLAs participated with $50m-$75m tickets. This comes after an $812m facility was closed to finance the Guara FPSO, which is being sponsored by MODEC and Schahin Group. About 60% of the facility came from Japanese ECA JBIC, while the rest took the form of commercial bank loan, with Bank of Tokyo Mitsubishi, ING, Mizuho and SMBC participating. Margins came at just below 200bp over Libor on the 12-year facility.
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Inbursa Prices MXP Floater
Mexico’s Banco Inbursa has issued MXP4.9bn ($422.64m) in 3-year floating rate bonds, after receiving 1.1x demand, says a banker on the deal. The bonds priced at TIIE+20bp, flat to guidance and at the same levels achieved by Santander Mexico earlier this month when it reopened its MXP5bn 3-year bond for MXP730m. A non-participating investor says that while Banco Inbursa is a good credit with a AAA rating on a national scale, spreads were not attractive enough to warrant participation. Bankers on the deal say the book size was smaller because Inbursa had capped pricing at TIIE+23bp. Santander, BAML and Actinver were the leads. Banco Inbursa last came to the market in April, when it priced MXP4.5bn 3-year at TIIE+20bp.
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Kuo, Herdez Buy US Food Company
Mexico’s Grupo Kuo and Grupo Herdez have agreed to acquire Texas-based avocado and guacamole producer Fresherized Foods. The companies decline to disclose the value of the acquisition, but Fresherized has annual sales of a round $140m. Megamex Foods is the acquiring entity, a JV between Herdez del Fuerte and Hormel Foods. Herdez del Fuerte is a JV between Kuo and Grupo Herdez. No advisors were used on the deal, according to a Kuo spokesperson, who adds that the acquisition was financed with cash on hand and that there are no plans to go to the capital markets to finance the deal.
Posted inDaily Brief
Los Grobo Pulls Brazil IPO Plan
Argentine grower Grupo Los Grobo is postponing the plan to spin off some of its Brazilian businesses in an IPO, according to bankers managing the sale. This comes after market conditions and weak demand forced the cancellation of fellow agricultural sector IPO Copersucar. The spinoff was to combine Los Grobo’s agricultural services businesses, the agricultural property acquisition and development activities of Sollus Capital, of which LG would own 100%, and the sugar and ethanol business of Companhia Mineira de Acucar e Alcool (CMAA), of which LG would own 69%. The principal owners are founding Grobocopatel family and Vinci Partners-backed investment company Sollus Capital. Bradesco, BTG Pactual, Credit Suisse and Itau were hired to manage the sale.