Chile’s Sonda has priced a CLP75.86bn ($158m) equity follow-on, getting just below its floor price, but offering a only minimal discount. The growing regional IT provider sold 53m shares at CLP1,430 each, compared to a CLP1,440 minimum and a 1,471 previous closing price. Competitive demand for the sale topped CLP192bn, with 53% sold internationally. International institutional investors made up the largest block of buyers, accounting for 46.2%, with hedge funds taking 1.6% and other international investors 5.2%. Local pensions bought 17.5%, local non-pension institutions accounted for 20.0%, retail investors 6.0%, and other local buyers 3.5%. Sonda had been authorized to sell 100m shares, and will offer up to 47m more in a preferential period open through early January. It is raising the funds for a $700m 2012-2015 expansion plan. About $200m is to be organic and $500m should come through acquisitions. Sonda is targeting growth outside Chile, specifically in Brazil, Mexico and Colombia. The company would use equity to fund about 40% of the plan, with 40% coming from cash and the remainder from debt. BTG Pactual and Goldman Sachs managed the sale, joined by Celfin on the local side. Sonda shares traded up to close at CLP1,476 Wednesday.
Category: Equity
Colombian Builder Launches Follow-on
Colombia’s Conconcreto has launched its equity sale, it says, targeting more than $130m-equivalent and using a discretionary allocation process seen as a novel move for a Colombian follow-on. In contrast to the usual process of setting a fixed price and then taking orders, the infrastructure specialist has indicated a fair value price of COP1,643 ($0.91) per share, and noted that a 12%-18% discount would be appropriate, or COP1,347-COP1,446. Buyers can now submit their bids, be they existing holders looking to exercise preferential rights or new entrants, through December 20. The discount range indicates a COP242.46bn-COP260.28bn ($134m-$144m) total size. Shares closed Tuesday at COP1,300. The 180m shares on offer should represent about 20% of the company post-offering. The proceeds are to be used to fund infrastructure projects. Bancolombia is managing the sale, with Bolsa y Renta and Exponencial joining it as structuring agents. Cemex Latam sued a similar discretionary allocation process in its November IPO. Conconcreto raised COP94.68bn in a December 2010 IPO.
Share Slide Roughs Up Marfrig Sale
Brazil’s Marfrig has priced a BRL1.05bn ($495m) equity follow-on, coming at an 11.6% discount and seeing weak demand after its share price dropped 22% during Monday and Tuesday. The meatpacker is offering 131m shares, including a 15% greenshoe and part of a 20% hot issue, at BRL8.00 each, according to the CVM, versus Tuesday’s BRL9.05 closing price. The sale was heard to be more than 1x subscribed. The sizeable discount comes after shares plummeted 15.5% in Tuesday’s session, following a 7.7% drop Monday. Marfrig had been aiming to raise more than BRL1.2bn. Additionally, the Comissao de Trabalho, Administracao e Servico Publico committee in Brazil’s congress has requested that company officials explain BNDES’s participation in the transaction, specifically its plans to convert fewer than 100%of the convertible debentures it holds, according to local press reports. The development bank owns 14% of Marfrig. “The shares have been falling in anticipation of this offering. It has likely been a difficult sell,” says an equity analyst following the company. He notes high leverage as among the major concerns. Indeed, the sale was done with reducing debt in mind, and was expected to reduce Marfrig’s net debt by 0.7x, from 5.7x Ebitda, according to Barclays. Its debt was downgraded to B1 from B2 in August, due to leverage concerns. BNDESPar, which holds BNDES’ minority stake, and controller MMS and were expected to exercise their full rights in the offering. Marfrig plans to use proceeds to repay debt and to strengthen its capital structure. Bank of America Merrill Lynch, Bradesco, Itau, Banco do Brasil, Deutsche Bank and Santander managed the sale. Peer Minerva fared a bit better last week in a smaller follow-on sale, raising BRL557m. Next up is Chile’s Sonda, releasing pricing this morning after closing books Tuesday on a deal targeting $160m-equivalent. Thursday is scheduled to bring a BRL1.30bn follow-on from Equatorial Energia and a more than $1bn-equivalent IPO of Macqu
Sonda Set for FO
Chile’s Sonda closed books Tuesday and was due to release the price this morning for an equity follow on targeting more than $150m. The information technology firm is selling 53m shares, indicating a CLP77.96bn ($162m) deal at Tuesday’s CLP1,471 closing price. Sonda had been authorized to sell up to 100m shares. The IT company is raising funds for a regional expansion plan, about which analysts are generally optimistic. In a report recommending a buy at CLP1,420, Banco Penta highlights 9% return on investment in the last five years, a rate that the brokerage sees Sonda able to maintain going forward. Bice notes an attractive entry point, with shares trading at 2013 P/E of 17.1x and EV/Ebitda of 8.5x, below historical levels of 22.1x and 10.3x. The specialist in IT, applications and platforms is spending $700m on a 2012-2015 expansion plan. About $200m is to be organic, and $500m should come through acquisitions. Sonda is targeting growth outside Chile, specifically in Brazil, Mexico and Colombia. The company would use equity to fund about 40% of the plan, with 40% coming from cash and the remainder from debt. BTG Pactual and Goldman Sachs managed the sale, joined by Celfin on the local side. Sonda has been a consistent acquirer in the region, most recently taking Brazil’s Euclid for $73m in May and Chilean rival Quintec last year for $61m. It has a presence in Chile, Brazil, Argentina, Colombia, Costa Rica, Ecuador, Mexico and Uruguay.
Aliansce Defines Equity Target
Brazil’s Aliansce plans to offer 16.7m primary shares in a December 12 equity follow-on, it says. This would suggest a BRL432m ($204m) transaction if done at Monday’s BRL22.50 close and a 15% greenshoe is used. A 20% hot issue is also available. The shopping center operator had originally indicated a BRL500m target. Aliansce is looking for funds to acquire, develop and expand shopping malls, and was due to start the official roadshow this week. Bradesco, BTG Pactual, Credit Suisse and Itau are managing the sale.
Estacio Plans Follow-on
Brazil’s Estacio plans to raise BRL623m ($294m) through an equity follow-on, it says. The education company plans to offer primary shares, as well as secondary shares sold by Private Equity Partners. It does not indicate the timing of the sale, which still must get the initial OK from regulators. Estacio is raising funds for acquisitions and organic expansion. It has hired Bank of America Merrill Lynch, Credit Suisse and Itau for the transaction. Estacio, which IPOed in 2007, last visited the equity markets for a BRL685m all-secondary share follow-on in 2010.
Meatpacker Ready for Equity
Brazil’s Marfrig is scheduled to price an equity follow-on of more than $600m today, continuing a busy pipeline for Brazilian issuers. The meatpacker is offering 105m primary shares, which would mean a BRL1.29bn ($608m) size based on Monday’s BRL10.71 closing price, assuming a 15% greenshoe is used. A 20% hot issue is also available. Controller MMS and 13% shareholder BNDESPar are expected to exercise their rights in the offering. Marfrig plans to use proceeds to repay debt and to strengthen its capital structure. Bank of America Merrill Lynch, Bradesco, Itau, Banco do Brasil, Deutsche Bank and Santander are managing the sale.
MMX Asks Holders for Equity
Brazil’s MMX Mineracao e Metalicos plans to raise up to BRL1.37bn ($646m) in fresh equity capital through a rights offering, the miner says. The plan is for existing shareholders to subscribe to up to 349m shares at BRL3.92 each through January 13. MMX shares closed Monday at BRL3.72. Controller Eike Batista bought 31m shares in October, taking his position in the company to 46.4%.
Carlyle Shrinks Qualicorp Holding
Carlyle continues to exit its position in Brazilian insurance provider Qualicorp, having shed a 46m share stake worth BRL955m ($455m) at Friday’s BRL20.75 closing price. The sale of the 17.47% portion through various market transactions brings the private equity firm’s position to 5.93%. Carlyle held a 40% position prior to Qualicorp’s BRL759m follow-on in April, in which it sold secondary shares.
Conconcreto Nears Follow-on
Colombia’s Concocreto is planning to raise funds through an equity follow-on, it says, likely targeting $120m equivalent. The infrastructure specialist plans to offer 180m primary shares, or 20% of the company post-sale, indicating a COP232.20bn ($128m) value based on Friday’s COP1,290 closing price. It does not yet indicate a date for the setting of the price and opening of the subscription period. The proceeds are to be used to fund projects. Bancolombia is managing the sale, with Bolsa y Renta and Exponencial joining it as structuring agents. Conconcreto raised COP94.68bn in a December 2010 IPO.