Ingevec has made its initial registration for an IPO, according to a banker managing the process, adding to the growing list of issuers from Chile this year. The construction company’s roadshow should start within the next month, the banker says, though other details about the exact size and timing of the transaction are yet to be determined. The float would be up to 30%. LarrainVial is managing. The construction, engineering and real estate company is raising funds for its expansion plan over the next few years, according to remarks from company officials in the Chilean press. Ingevec has a project portfolio of more than $300m, according to local press reports, and has diversified in recent years into areas including properties and producing modular bathrooms and kitchens.
Category: Equity
Australis Set for IPO
Chilean fishing company Australis Seafoods is expected to raise more than CLP33bn ($72m) when it prices its IPO this morning. The deal follows a string of transactions from the sector, but is seen coming cheap to competitors. Books were due to close yesterday for the sale of 187m shares, representing a 13% free float. Market expectations range from CLP175-CPL190, indicating a likely CLP32.73bn-CLP35.53bn size. The third Chilean fishery to IPO in the last 7 months, Australis is seen as inexpensive against listed peers. For instance, local shop Bice calculates 8.9x 2011 EV/Ebitda based on a fair value price for the company, compared to a 13.8x industry average and 15.6x for AquaChile, which recently went public. Bice spots fair value at CLP209.5 per share, and recommends buying at up to CLP184.4. It is “one of the most profitable companies in the Chilean salmon farming industry, achieving in 1Q11 a consolidated Ebitda/Kg of $2.1,” IMTrust says. It spots fair value at CLP192, and recommends the stock at up to CLP178. IMTrust notes that, in addition to weather, regulatory and other risks that affect the industry as a whole, the main risk for Australis is its short 3-year history as an integrated unit. The company, established in 2007 to consolidate the various fish businesses of Chilean businessman Isodoro Quiroga, consists of three branches: Australis Mar, which raises and harvests salmon and trout, Landcatch, which produces salmon eggs and smolts, and 50% of True Nature Holdings, a US salmon products distributor acquired this year. Australis plans to use the proceeds to improve production, and expects to spend $274m through 2015. It had $23.0m equivalent in Ebitda in 2010, compared to $13.7m in 2009. IMTrust forecasts $72m Ebitda for this year, but warns of a possible decrease as soon as 2012 due to falling prices caused by increased competition as producers across the board ramp-up production to levels last seen before a disease struck Chile’s salmon business in 2008
Chiloe Looks to Join Listed Fisheries
Salmon producer Cultivos Marinos Chiloe has registered with Chile’s securities regulator, normally the first step in the IPO process. Celfin is advising on the process, for which there is not yet an indication of timing, according to a banker at the advisor. Founded in 1988 and controlled by businessman Francisco Jose Lopez, Puerto Montt-based CM Chiloe raises salmon in the southern part of the country, and is focused on exports to North America and Japan. Chile’s market has been among the region’s most active for new issuance this year, particularly for fish companies. AquaChile raised $374m equivalent in its IPO last month, and Australis Seafoods should raise $70m-plus today. Traditionally large exporters of salmon and trout, Chile’s fisheries are in need of fresh capital to expand production as they recover from a disease that hurt the industry’s production in 2008-2009.
Cruz Blanca Sets IPO Date
Chile’s Cruz Blanca is set to close books for its IPO on June 22, with the price to be announced the following day, according to a banker on the deal. The health services provider has been marketing in LatAm, the US and UK. The sale of 122m primary and up to 100m secondary shares is expected to raise about $200m equivalent. The offer represents up to 35% of the company, according to the prospectus. The health insurance provider and operator of medical centers and clinics plans to use 65% of the proceeds for its investment plan. The plan consists of opening new locations for its Integramedica walk-in clinics, and opening and renovating locations under its three brands of medical centers, as well as unspecified growth through acquisitions and organic means. The other 35% would be used to repay debt. Bice, Celfin and IMTrust are managing the sale. The issuer, owned by Grupo Said and Linzor Capital, was founded in 1999, though the Cruz Blanca brand was created in 2008 with the acquisition of health insurer Isapre ING. The health insurance operations represent 74% of Cruz Blanca’s business, according to the prospectus. Its total 2010 Ebitda was $31.2m equivalent. Cruz Blanca claims 20% of the market in Chile, covering 530,000 people, according to its website.
BR Properties Readies FO
BR Properties has set a June 28 pricing date for an equity follow-on that could top BRL700m ($440m). The Brazilian commercial property developer and manager plans to sell 35m primary shares, which would raise BRL708m at Tuesday’s BRL17.59 closing price, if a 15% greenshoe is included. A 20% hot issue is also available. Marketing is set to begin June 17. 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 are managing 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, and followed that with a $200m perpetual bond in October which it later retapped for $85m.
Brazilian Health Sector Growth Drives IPOs
Health insurer Grupo Qualicorp and drugstore chain Brazil Pharma have launched IPOs set to price this month, hoping that the Brazilian healthcare story will draw investors in what has been a tricky year for new issuance. “Both issuers are benefitting from rising incomes and the expansion of formal sector employment,” says a Sao Paulo-based equities analyst. He notes that Brazil Pharma in particular will be motivated by the success of Droga Raia’s BRL655m ($415m) IPO last year. With about 85% of the market, Qualicorp, the Brazilian health plan vendor controlled by PE firm Carlyle Group, is likely looking to raise more than BRL1bn for expansion to keep ahead of other entrants to the market, he says. Comps for Qualicorp are difficult to find, but listed dental insurer Odontoprev is a good starting point. Qualicorp has set a range of BRL16-BRL19 for the June 27 sale of 27.2m primary shares and 45.4m secondary shares. This would indicate a BRL1.46bn sale if the issue is sold at the BRL17.50 midpoint and a 15% greenshoe made up of both primary and secondary shares is included. A 20% hot issue is also available. The selling shareholders in the secondary portion include Carlyle and one company executive. The US firm, heard to be looking to increase liquidity at a time when selling US assets might be difficult, would see its stake drop to 39.7% from 68.4%, if the greenshoe is included. Founder Jose Seripieri would not sell any shares, but see his stake fall from 31.3% to 28.0%. Qualicorp plans to put 80% of the proceeds from the primary sale toward acquisitions in the health plan area, 15% to technical upgrades and 5% to general purposes. Qualicorp, founded in 1997, recorded Ebitda of BRL127.5m in 2010, up from BRL56.4m in 2009. Bank of America Merrill Lynch, Bradesco, Credit Suisse and Goldman Sachs are managing the sale. Brazil Pharma, meanwhile, is set to price June 22. The retail pharmaceutical operation run by BTG Pactual plans to sell 20m primary shares at BRL16.25-BRL
Valid Launches ADRs
Valid, the Brazilian payment processor known until last year as ABnote, has initiated an ADR program in order to increase liquidity. The ADR will be worth one share and trade on the OTC. Citi is the depository institution. Shares closed at BRL20.00 ($12.66) on Tuesday.
EDP Sets Timing for EDB Selldown
Energias de Portugal (EDP) has set June 29 as the date of its follow-on offer of 19.9m Energias do Brasil (EDB) shares, and a roadshow is scheduled to begin June 20. At Monday’s BRL38.33 closing price, such a transaction would raise BRL763m ($480m). A 10% greenshoe is also possible. The Portuguese utility owns 49.1% of EDB and would reduce that to 35.3% after the sale, if the 10% overallotment is included, with the free float increasing to 48.8% from 35.0%. Espirito Santo, Itau, Morgan Stanley and Santander are leads. EDP had said in March that it aims to raise EUR500m though asset sales this year.
LatAm Equity Markets Set to Rise: Citi
LatAm’s equity markets are expected to return 32% by the end of the year, according to a report by Citi. Growth will be driven primarily by Brazil’s Bovespa, which the bank expects to generate a return of 38.1% for the year to reach 87,500. IPO activity is expected to continue at a healthy pace. Despite fears that LatAm equity issuance is overdone, Citi notes only 15 companies have come to market so far this year, compared to 37 companies going public in a single quarter during the 2007 boom. “We see little risk of deal exuberance in Latin America,” Citi says. The amount of equity raised by LatAm IPOs and follow-ons remains far below 2007 levels, but there has been an increase in sector and country diversification. Brazil issuance represented 89% of activity over the past two years, but that figure has dropped to 58.2% this year, due to an increase in issuance from other countries, rather than a decrease in volumes from the region’s largest economy.
Kroton Sets FO Date
Brazil’s Kroton will begin marketing an equity follow-on June 15 and plans to price June 29, it says in a prospectus. The private education company plans to sell 19.5m units, each consisting of one ordinary share and six preferred shares. Such a sale would raise BRL391m ($244m), based on Friday’s BRL20.05 per unit closing price, or BRL450m if a 15% greenshoe is included. A 20% hot issue is also available. Of the 19.5 units, 1m are secondary shares to be sold by four minority holders, as are up to 1m units of the hot issue. The issuer is seeking to improve liquidity and raise funds for expansion. Bradesco, BTG Pactual, Itau and Santander are managing.