Category: Equity

Brazilian educator Kroton has priced a BRL425m ($266m) equity follow-on, coming at a 1.3% discount. The issuer priced 22.1m units, each consisting of 1 ordinary share and 6 preferred shares, at BRL19.25 each. Kroton’s share price had dropped 2.5% Wednesday to BRL19.50. The total includes a 15% greenshoe. In the deal, 0.8m shares are secondary shares sold by four minority holders. Kroton is raising funds to improve liquidity and expand. As Brazil’s middle class grows, the country’s private education sector is being rapidly consolidated by large listed operators such as Kroton, Estacio and Anhanguera. All three have now tapped the equity markets in the past 9 months to fuel their rapid expansion. Bradesco, BTG Pactual, Itau and Santander managed the Kroton transaction. Brazil’s Mahle-Metal Leve is scheduled to price today an approximately BRL300m follow-on of secondary shares sold by its German parent. Friday brings the IPO of E&P operation Perenco Brasil, which could raise BRL750m or more.

BR Properties has priced a BRL690m ($430m) equity follow-on, coming flat to Tuesday’s close. The commercial developer sold 40.3m primary shares at BRL17.15, matching the secondary level reached after shares fell 2.0% on the day. The total includes a 15% greenshoe. Proceeds will be used for acquisitions as BR Properties looks to consolidate its position in what is still a highly fragmented sector. Bradesco, Itau, Banco Safra and Santander managed the sale. BR Properties acquires, manages and develops offices, warehouses and retail centers in Sao Paulo, Rio de Janeiro and Parana states. It raised BRL1.07bn in its IPO in March 2010.

Brazilian watchmaker Technos has priced a BRL462m ($290m) IPO, scraping the bottom of its price range as a challenging week for Brazilian equity debuts continues. The 10.9m primary and 17.0m secondary shares priced at BRL16.50 each, at the low end of the BRL16.50-BRL20.50 range. The total includes a 15% greenshoe, which went entirely in the secondary portion. The relatively small size and the large number of equity offerings this week acted as headwinds for Technos, according to one New York-based EM equity investor who chose not to participate. “For larger institutional investors, they need to have a liquid stock.” With three IPOs and four follow-ons coming this week, it is a buyer’s market. Fellow Brazilian issuer and health benefits provider Qualicorp priced at BRL13 Monday, missing its BRL16-BRL19 range, while Chilean healthcare company Cruz Blanca disappointed by pricing at CLP500 last week, below its CLP525 floor. Brazil Pharma’s IPO also came in at the low end last week. Technos’ book generated strong interest among domestic accounts, and was evenly split between Brazilian and US/European investors, including institutional accounts from Brazil and new investors from the US and Europe, according to a banker on the deal. The transaction was over two times subscribed. Proceeds from the primary offering will go to finance the company’s growth plan, including potential acquisitions, payment of the acquisition of shares and to repay a loan with HSBC. The secondary shares were sold by Technos’ controlling group, which includes PE firm DLJ (40%) and Brazilian asset manager Dynamo (32%). Credit Suisse, Goldman Sachs and Itau managed the sale. Founded in 1956, the issuer owns the Technos and Mariner brands and also represents the Mormaii, Euro and Seiko lines in Brazil. On tap are follow-ons from Kroton tomorrow and Mahle-Metal Leve Thursday, as well as an IPO from Perenco Friday.

JBS has authorized a share buyback program of up to 37.5m shares with the aim of increasing shareholder value, the company says. The schedule and exact number of shares to be acquired has not been disclosed. The Brazilian beef company’s stock climbed 0.39% Monday to close at BRL5.11.