Teco Energy has agreed to sell its stakes in two power plants and related facilities in Guatemala for $228m, it says. In the cash deal, the Teco Guatemala unit will sell the Alborada and San Jose plants and the related solid-fuel handling and port facilities to privately-held Sur Electrica. Teco has decided to focus on its core US businesses, and will use $25m of the proceeds from the sale to prepay projects debt tied to San Jose, and the remainder to repurchase Teco shares and pay down US-level debt. The company expects the sale to be dilutive to its earnings in 2013 and 2014. The Alborda portion closed last week, while the San Jose portion should close in 1Q 2013. Citi advised Teco.
Category: M&A
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Equatorial Clinches Celpa Buy
Brazil’s Equatorial Energia has agreed to purchase control of power distributor Centrais Eletricas do Para (Celpa), it says. Equatorial will pay a nominal price of BRL1.00 for 39.1m shares, or 61.37% of the indebted unit of Grupo Rede. The agreement puts an end to the saga that started with Celpa filing for bankruptcy protection in February, citing deterioration in its finances. The distributor had also presented a restructuring plan to creditors. Equatorial is controlled by private-equity fund Vinci Partners Investimentos, which is expected to merge Celpa with its Companhia Energetica do Maranhao (Cemar).
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BTG Ups Stake in Retailer
BTG Pactual’s private equity arm has exercised the option to buy an additional 30% of retailer Leader Participacoes, following its May announcement of the acquisition of 40% for BRL665m ($334m). The terms are similar to the earlier deal, in which BTG’s funds were set to pay BRL558m for a 35.88% position, with leader holding a rights offering, through which BTG acquires new shares worth another 6.42%. Leader operates in the clothing and housewares sector.
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Mitsui Adds GN Mexico Gas Stake
Mitsui & Co is set to purchase a 15% stake in Gas Natural Mexico (GNM), it says, spending $93m. The Japanese buyer has agreed to acquire 13.25% from Spain’s Iberdrola for $82m and another 1.75% from other shareholders for $10.8m. The move for the gas distributor expands Mitsui’s footprint in Mexico, where it is engaged in various gas-related activity, notably the Manzanillo LNG import terminal. The deal represents Iberdrola’s exit from GNM, as part of the Spanish company’s broad non-core asset sale plan, which aims to raise EUR2.5bn ($3.25bn) during 2010-2012. The completion of each transaction is subject to regulatory approvals. Gas Natural and a subsidiary control 70.9% of the Mexican unit.
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Pacific Rubiales Enters Brazilian Farm-in
Colombian oil producer Pacific Rubiales has agreed to a farm-in agreement for four blocks in the Bloques Karoon in Brazil, with an option to take a stake in a fifth. The blocks are owned by Karoon Gas Australia, and with the agreement, Pacific Rubiales takes a 35% stake in four of them and has the option to take a 35% stake in the fifth. An upfront payment of $40m covers sunk costs and could be increased by three wells at $70m each as the process continues, with the expectation of up to some $250m total to be paid out over the next 1.5-2 years. Pacific Rubiales plans to use cash on hand or generated cash flow to fund the project, and works with internal advisors on the deal.
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Safra Tightens Grip on Swiss Bank
Safra is set to control 90.47% percent of Swiss private bank Sarasin following an offer to minority shareholders, it says. The bank has also extended the offer to October 5 in the hope of getting additional acceptance. Safra bought a controlling stake in the Swiss private bank from Dutch cooperative Rabobank last year.
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UK Security Firm Adds in Brazil
UK-based security specialist G4S has agreed to acquire 100% of security provider Vanguarda Seguranca e Vigilancia, it says. The deal, for which the value is not disclosed, is done through G$S’ SSE DO Brasil unit and purchased from the founders. Vanguarda provides security personnel, security systems and monitoring services and mobile patrols to key strategic sectors such as banking, transportation, commercial buildings, education, health and public services, and Interativa provides unarmed security and facilities services. The pair’s combined revenue is approximately GBP165m ($266m), and G4S notes that the combined consideration for Interativa and Vanguarda was in line with the group’s “normal” multiple of 8x-10x the companies’ current year Pbita. Brazil is estimated to be the fourth largest security market in the world, and is expected to grow by approximately 10.5% per year, with a forecast market size of $16.6bn in 2019, G4S says. The company was not available for additional comment.
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Carlyle Buys into Brazilian Furniture Maker
The Carlyle Group has agreed to acquire 60% of Brazilian specialty furniture retailer Tok&Stok from founders Ghislaine and Regis Dubrule, it says. Ghislaine Dubrule is to remain as CEO of Tok&Stok following the transaction, and the founders will retain a 40% stake. Carlyle does not disclose the value of the transaction, estimated to be around BRL700m ($347m) in local media. The funds used in the purchase come out of a $1bn pool of capital managed by Carlyle’s South America Buyout Fund and the Fundo Brasil de Internacionalizacao de Empresas FIP, a local fund advised by Carlyle and Banco do Brasil. BTG Pactual is heard to have advised the retailer. The transaction is subject to regulatory approval by antitrust authorities and is expected to close in the fourth quarter of 2012. Founded in 1978, Tok&Stok generated approximately BRL1bn in sales through its 35 stores in 12 Brazilian states.
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Still Seeking a Buyer, Cruzeiro Extends Buyback
The credit guarantee fund administering a tender for Brazil’s Banco Cruzeiro do Sul extended its deadline by one day, it says, and is expected to make an announcement about the fate of the bank today. The Fundo Garantidor de Credito’s (FGC) offer to buy back $1.58bn of the mid-size Brazilian bank’s debt needs 90% acceptance from creditors – it was short of this mark as of the August 28 deadline – and it must find a buyer for the troubled bank. The tender had hit 75% as of the early deadline, suggesting the 90% threshold could have been reached by Thursday’s final deadline. Finding a buyer is perhaps less certain, with rumors flowing in the local press regarding which large Brazilian bank – the buyer must have at least BRL2.5bn ($1.24bn) in assets and able to inject some BRL800m into Cruzeiro – might be interested. The tender launched in August offers about 49% of face value on six seires of dollar bonds. The FGC is offering $560 cash per $1,000 principal for the bank’s 8.00% 2012 bonds. It is also offering $510 per $1,000 for its 7.00% 2013, 7.625% 2014 and 8.50% 2015 and 8.250% 2016 bonds. Holders of the 8.875% subordinated bonds receive $260 per $1,000. Those that accepted before a September 5 early deadline receive an extra $50 per $1,000. Bank of America Merrill Lynch and HSBC are managing the tender. Brazil’s central bank seized Cruzeiro in June after finding “unsubstantiated asset items.” The bank has been under the temporary administration of the FGC during the fraud investigation.
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Swiss Insurer Adds Mexican Surety
Swiss insurer Ace has agreed to buy Mexican surety bond specialist Fianzas Monterrey from New York Life, it says, paying $285m cash. The deal expands Ace’s presence in Mexico, adding to commercial property and casualty, accident and health, and life insurance operations. The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to be completed during the first quarter of 2013. New York Life is shedding Fianzas, which it bought in 2000 from Aetna and Bancomer, because it is a non-core business. Established in 1943, Fianzas provides guarantees on construction and industrial projects, and is Mexico’s second-largest surety provider. Goldman Sachs advised New York Life.