Mexican bottler Coca-Cola Femsa (KOF) has agreed to buy Brazilian firm Companhia Fluminense de Refrigerantes (CFR) for $448m in an all-cash deal that broadens the firm’s LatAm footprint. CFR’s Ebitda came to $40m in the year to the end of March. The acquisition was seen as positive for KOF by one analyst following the company, who says the deal is small for the buyer but offers synergies with its existing business. CFR operates in parts of Brazilian state Minas Gerais, Rio de Janeiro and Sao Paulo. It has one bottling facility and four distribution centers. KOF has 62 bottling centers worldwide, having expanded out of LatAm in December to buy a Philippine bottler. KOF CFO Hector Trevino told LatinFinance recently the firm would look at further acquisitions in Mexico or Brazil, where it can leverage its existing infrastructure and capabilities, and would consider local currency funding to cover any such purchases. Fitch says the transaction will be fully financed with the firm’s available cash and will not alter KOF’s ratings.
Category: M&A
Itau Picks Up Uruguayan Depositors
Itau Unibanco has agreed to buy Citibank’s retail banking business in Uruguay, including credit cards and savings accounts. Citi’s Visa, Mastercard and Diners businesses made up just over 6% of market share in Uruguay last year.
Banco de Bogota Buys Guatemala’s Reformador
Banco de Bogota has agreed to buy Grupo Financiero Reformador through its Credomatic subsidiary for $411m. The deal will make BAC Credomatic Guatemala’s third largest private bank, with $2.8bn in assets. Banco de Bogota is a subsidiary of Grupo Aval.
Itau Picks up BMG Insurance Arm
Itau Unibanco has agreed to buy Banco BMG’s insurance business for BRL85m ($39m). The target, BMG Seguradora, generated BRL42.4m in retained premiums in the first five months of the year, a 77% increase year on year. Itau says the deal will not have a significant impact on its results. Itau already has an agreement with BMG for the sale of payroll loans in Brazil.
M&A: Beefing up
A 5.85 billion real ($2.73 billion) deal between JBS and Marfrig, agreed in early June, illustrated the contrasting fortunes of the two Brazilian meatpackers. Though nobody in Brazil’s beef sector […]
Brazil’s Indusval to Buy Intercap
Sao Paulo based lender Banco Indusval has agreed to acquire Banco Intercap at its half-year book value, it says in a regulatory filing after Wednesday’s close. Intercap shareholders will take a stake in Indusval, with prices to be determined once financial statements to June 30 have been prepared. The deal will grow Indusval’s capital base, such that shareholder’s equity will total close to BRL700m ($320m). Indusval had a market cap of BRL451.6m at the end of the first quarter, and reported a pre-tax loss of BRL145.2m over the period. One of Intercap’s controlling shareholders, Afonso Antonio Hennel, is to become vice-chairman of Indusval, and the other, Roberto de Rezende Barbosa, will join the board. The acquisition is subject to regulatory and shareholder approval. The privately-held Intercap had shareholders’ equity of BRL117m at the end of the first quarter.
Enersis Earmarks $2.4bn for Acquisitions
Chile’s Enersis could spend up to $2.4bn over the next two years increasing the size of minority stakes and on new acquisitions, CEO Ignacio Antonanzas Alvear says. The energy generator and distributor could spend $300m-$700m per opportunity to increase its stakes in companies in Chile, Colombia, Peru and Brazil. New acquisitions could include a large “transformational” purchase in Brazil or smaller deals of $400m to $1bn in Peru or Colombia. The company will look for distribution businesses that can be turned around. “Of course I would love to be buying something tomorrow, but no rush,” he says. In March, Enersis raised CLP2.84trn ($6bn) in an equity capital raise, intended to fund acquisitions. Antonanzas spoke to LatinFinance on the sidelines of MILA Day in New York. The firm reported operating revenue of CLP1.46trn in the first quarter, down from CLP1.62trn a year earlier.
Alsea’s Axo Acquisition Confuses
Mexican fast food operator Alsea will buy a 25% stake in retailer Grupo Axo, but the company has not released any financial details about the transaction. The lack of details on the purchase price and margins of the business being acquired, as well as the fact that Axo operates in a different area to Alsea, create uncertainty around the move, says Banorte-Ixe analyst Marisol Huerta. But the transaction could end up being positive for the company in the long run, she added. Another Alsea analyst declined to comment on the acquisition, saying it was impossible to judge whether it was positive or negative in the absence of detail. Alsea shares fell 3.83% on Tuesday, closing at MXP27.65. The deal is set to close on July 4. Officials at Alsea could not be reached for comment.
ICA Exits RCO
ICA has agreed to sell its position in the Red Carreteras de Occidente (RCO) road concession to partner Goldman Sachs for MXP5.07bn ($379m), it says. The unloading of the 18.7% stake comes as the Mexican builder sells various assets in order to improve its liquidity position as its project backlog stalls. It will use proceeds to repay short term debt. “This is the result of a competitive process started one year ago,” ICA CFO Victor Bravo says in a conference call. He explains the deal comes after ICA examined several alternatives for the asset, for which ICA has fulfilled its construction obligations and represents only a “financial investment” going forward. The deal comes at about 14.1x 2012 Ebitda, which Bravo calls “comparable” to the industry standard, and gives ICA a gain of MXP700m over the book value. The transaction should leave Goldman Sachs with a 70% stake in the 750km Mexican road network, with the remainder held by owners of RCO’s certificados de Captial de Desarrollo (CCDs). ICA will continue to provide services to the concession. The deal is subject to government and regulatory approval, and is expected to close in Q3. RCO is a concession won in 2007 by ICA and Goldman Sachs, and popularly known as Farac at the time. ICA is scheduled to raise more than $300m through next week’s sale of its shares in airport operator Grupo Aeroportuario del Centro Norte (OMA). The RCO sale should knock out a third of ICA’s corporate debt, according to Monex, with the OMA divestment taking out another 30%, leaving ICA with 8.9x net debt/Ebitda, down from 11.6x in 1Q 2013. RCO, meanwhile, is planning a reopening of its domestic 2032 ABS, looking to raise up to MXP1.8bn. It raised MXP8.12bn through the original toll-revenue securitization in Mexico’s domestic market last year, and in March brought the cross-border markets a first-of-its-kind MXP-denominated bond secured by toll road assets, raising MXP7.5bn.
Bradesco Increases Fleury stake
Minority investors including a subsidiary of Bradesco have increased their stake in Brazilian healthcare services group Fleury, Fleury says, spending BRL278m ($128m). The Delta FM&B investment fund has exercised a put option to sell Fleury shares to the Integritas vehicle through which the Core Participacoes fund and Bradesco’s Bradseg Participacoes hold their stake in Fleury. Core acquired 9.8m shares, or 6.27%, and Bradseg bought 3.3m shares, or 2.11%, all at a BRL21.05 strike price previously agreed. The level compares to Tuesday’s BRL18.89 closing price. Core now holds 6.27% of Fleury and Bradseg 4.63%. Delta FM&B made the divestment to focus on investments in its hospital chain, Rede D’Or.