Category: Equity

Fleury, the Brazilian diagnostics lab, has priced its IPO at BRL16.00, the midpoint of its BRL15.00-BRL17.00 range, raising BRL630m, assuming a 15% greenshoe is exercised in the coming sessions. The deal, comprised of 34.3m shares and 5.1m greenshoe shares, was said to be multiple times oversubscribed, claim executives close to the trade, though the midpoint pricing would suggest demand for the relatively small issue may have been cool. “I think it will end up trading well, and at a premium to DASA, because the management is better,” says one investor who chose not to participate in the deal. DASA shares closed at BRL55.20, up 4.2% Tuesday, outperforming the 0.1% drop of the Ibovespa. DASA stock trades at a forward P/E ratio of 55x, according to Economatica. Data for Fleury’s multiples was not available at press time. A second investor said he didn’t care to participate in the deal because of its relatively small size. One third of the proceeds from the offering are earmarked for acquisitions. Bradesco, JPMorgan and Morgan Stanley led the deal.

After shelving plans to go public in October 2007, BR Properties (BRP) is heard close to re-launching an IPO. A person familiar with the move says the plans to take the commercial property developer public are already well underway, and that 3 banks have already been informally tapped for the offering. Itau BBA Bradesco BBI and Santander appear to have scored joint books on the deal. While Credit Suisse was slated to lead the first attempt in 2007, it appears, at least initially, that it may not be among the lead banks. However, an executive at BRP says nothing has been confirmed or officially determined yet regarding timing or underwriters, and adds that the company is in no hurry to go to market. He says that BRP is particularly hesitant to pin down specific timing following its 2007 pullback, which was driven by poor market conditions. In the meantime, the developer, which is 25% owned by GP Investments, remains well capitalized, notes the official. Following its announcement to withdraw in 2007, BRP raised BRL220m with existing investors through a private raise. In addition to GP Investments, funds controlled by Rothschild, Safra and vehicles formerly held by Lehman Brothers have stakes in BRP. There is no single controlling shareholder. Any return to the market will depend largely on market conditions, notes the company executive.

Cruzados, the holdco for the Universidad Catolica soccer team, has raised CLP12.4bn ($24.8m) in the second Chilean IPO of the month. It sold 30m primary and 10m secondary shares at CLP310 each, in an offer 6x subscribed, according to documents published on the Bolsa. Approximately 48% of the deal went to institutional investors, and 48% to retail. Proceeds from the transaction will be used to pay debt and invest in new players and professional staff. IM Trust and BICE managed the sale. Retailer Empresas Hites raised CLP21.5bn last Thursday in Santiago’s first new listing since casino operator Enjoy in July. Catolica’s first division rivals Universidad de Chile raised CLP9.5bn though Chile’s only IPO of 2008.

Empresas Hites has raised CLP21.5bn ($43m) in Chile’s second IPO of the year. The retailer sold 104m shares, representing a 30% stake, at a price of CLP206. The department store operator plans to use proceeds to finance its expansion plan and repay short-term debt, according to the company. Chile’s private pension funds bought 33.5% of the offer, according to a statement distributed at the exchange, and demand reached eight times the amount offered. BBVA and Banchile managed the sale. Casino operator Enjoy raised $42m in a July IPO. Cruzados, the holdco for the Universidad Catolica soccer team, is scheduled to price imminently an IPO of 30m primary and 10m secondary shares through IM Trust and BICE.

Banco do Brasil’s (BdB) ADR began trading OTC in the US Tuesday. Each ADR represents 1 ordinary BdB share, which trades on the Bovespa under the BBAS3 ticker. The state-owned Brazilian bank has hired BNY Mellon as its depositary institution for the listing. BdB is also studying a sale of shares to boost its float to 25% that could total up to BRL3.6bn, according to Itau Securities’ estimate.

Brazilian diagnostics laboratory company Fleury has unveiled key details of its plan to issue shares through an IPO, which is very likely going to be this year’s last initial offering. The deal will include a sale of 34.3m units at BRL15.00-BRL17.00. It will also involve a greenshoe of up to 5.1m shares. At the BRL16.00 midpoint, the deal could raise BRL630m. Pricing is scheduled for December 15, the tail end of the pre-holiday issuance season. Bradesco BBI is leading, with Morgan Stanley and JPMorgan as co-leads.

Amid growing investor appetite for an IPO from the still untapped Brazil pharmaceutical industry, Ache, one of the country’s leading drug companies, is heard in advanced talks to go public. Brazil’s largest investors, including portfolio managers at Itau-Unibanco Asset Management (IUAM) and Bradesco Asset Management (BRAM), say a substantial, well-run company from that sector would draw significant interest. “Pharmaceutical companies all over the world are listed but here in Brazil we still don’t have any public ones,” Herculano Anibal Alves, who heads BRAM’s $17bn equity arm, tells LatinFinance. “Our [pharma] sector here is relatively large and there’s also the opportunity for consolidation,” he adds. However, Alves notes that he does not know of specific names considering a float. The Brazil pharmaceutical sector, which includes a robust generic drugs industry, is by far LatAm’s largest. Its sales grow at an estimated 17% a year, with Ebidta margins of close to 40% a year, according to an industry insider. There are a handful of large private entities including EMS, Medley and Ache. Ache Laboratorios Farmaceutico reported 2008 Ebitda of BRL304m, up 4% year-on-year. Net indebtedness meanwhile fell to BRL42m from BRL105m the previous year, and the company claimed a 6.3% market share. “[Ache is] very close to being ready to do an IPO,” says the person close to the firm. The process to go public has been under discussion for 3 years, he adds. “[The company] would rather do it at the right time rather than rush out to the market,” says the executive. He adds that a lead bank has not been chosen, but bankers away from the process say BTG Pactual has the Ache mandate. BTG equity executives could not be reached for comment.

Brazil’s Tecnisa says it sold BRL200m in non-convertible debentures in 4 tranches, 3 due in 2012 and one in 2013. A company spokesman says they all are paying IPCA plus 10.42%. Proceeds will be used for capex. BTG Pactual managed the sale.

Brazil’s Bradesco has approved a plan to issue BRL2bn worth of new shares to existing holders of its preferred and ordinary stock in an effort to boost its liquidity on the Bovespa and the NYSE, it says in a statement. It will issue 312m new shares, half of which will be preferred stock and the other half ordinary shares, to existing holders, whose eligibility dates are yet to be determined, at a ratio of 10 to 1 for both Bovespa-traded shares and ADRS.