General Shopping Brasil has acquired the Shopping Bonsucesso mall for BRL130m ($64m), it says. The mall operator projects an 11.6% rate of return. General Shopping plans to take out debt for up to 60% of the purchase, it says, at up to 10 years, without offering additional details. The company did not respond to a request for additional comment.
Category: M&A
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Scotia Makes Colombia, Mexico Buys
Scotiabank continues to expand in the LatAm, with a pair of small but strategic buys in Colombia and Mexico. The Canadian bank has agreed to buy a 51% stake in Colfondos AFP from the Colpatria holdco. The deal follows last year’s $1bn buy of 51% of Colpatria itself, though Scotia says Tuesday’s is a separate transaction. Colfondos is the fourth-largest out of five pension funds in Colombia, accounting for about 10% of the assets under management, but people following the sector point to strong growth possibilities. Scotia does not disclose the size of the deal, saying the terms of the transaction are not financially material. “This is relatively small, but it is important to have integration with the other Colpatria assets,” says a Colombia-based analyst following the country’s banks. He notes that Colfondos has about $110m-equivalent in equity, and that previous deals in the sector have gone at 1.6x-1.8x equity, but cautions that such a comparison is difficult as several other factors would be in play. Scotia specifically highlights expanding Colfondos, which has AUM of $9.25bn-equivalent, in its plans. Scotia also operates pension funds Profuturo AFP in Peru, acquired in 2008, and Scotia Crecer AFP in the Dominican Republic, acquired in 2007. Separately, in Mexico, Scotiabank has agreed to acquire all of the shares of Credito Familiar from Banamex. It does not disclose the value of the transaction.
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CFR Buys Big in Colombia
CFR Pharmaceuticals has agreed to acquire Colombia’s Laboratorio Franco Colombiano (Lafrancol), it says, in a $562m buy that is uncharacteristically large for the expanding Chilean, and makes it the largest pharmaceuticals company in Colombia. The deal, to be funded with cash and an unspecified amount of debt, is another example of dominant Chilean players expanding across the Andes, with CFR already claiming the position as the largest pharmaceutical company in Chile and Peru. “This acquisition is very significant, and we believe is the last one for CFR’s expected inorganic expansion plan. The acquisition is actually the largest one in the history of Latin America in the pharmaceutical industry. The Colombian market is huge, with more than 48m people, and Lafrancol is the largest laboratory in the country,” Javier Gunther, equity analyst at IMTrust, tells LatinFinance. CFR had been making smaller buys, but a larger one was expected given what the company said about its plans at the time of last year’s IPO, Gunther says. The transaction represents 2.8x EV/revenue, according to a person familiar with the transaction, based on about $200m in annual revenue, noting that the multiple is in line with recent deals in LatAm. Multiples have gone up in the sector, says the person, but that makes sense given the growth opportunities. In the case of CFR, its purchase brings cost and revenue synergies and expands beyond CFR’s previously small Colombia footprint. Higher multiples also mean families likely give more consideration to selling their businesses. He expects continued consolidation in LatAm as larger pharmaceutical companies continue seek growth in fragmented markets. The sale is expected to close before the end of the year, pending regulatory approvals. CFR was advised by Deutsche Bank and law firm Honorato, Russi & Eguiguren, and Lafrancol was advised by Estrategias Corporativas and law firm Brigard & Urrutia. CFR raised $368m-equivalent in an IPO last year, and last
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Helm Weighs Options
Owners of Colombia’s Helm Bank are in talks about alternatives for the bank, the bank says, responding to recent speculation regarding a sale. The institution “is continuing in the process of evaluating different alternatives for the bank with none having yet resulted in a definitive transaction,” it says. With several Colombian FIG assets changing hands at high multiples this year, Helm has been the target of many acquisition rumors in the local and international press, most recently by Chile’s Corpbanca, who bought Santander Colombia in December for $1.16bn.
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Rubiales Ups Port Investment
Pacific Rubiales has purchased an additional $50m stake in Pacific Infrastructure, it says. The Canadian and Colombia-listed oil company purchased 50m shares at $1.00 per share. The addition follows an initial $38m purchase in March of shares in the Panama-based developer of the Puerto Bahia port complex in Cartagena and a pipeline linking it with Covenas. Pacific Rubiales now holds 44.1% of Pacific Infrastructure, and has the option to purchase $70m more at the same terms.
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Itau Buys Out Retail Credit JV
Itau has agreed to pay BRL83m ($41m) to acquire the stake it still does not own in a retail financing joint venture with Lojas Americanas, it says. Lojas Americanas is to pay BRL112m to end a tie-up agreement with Itau that prevented it from teaming up with another bank for this type of JV.
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Dutch Take Brazilian Animal Supplement Maker
Dutch vitamin maker Royal DSM has agreed to acquire Tortuga, a privately-held Brazilian animal nutritional supplement company, for EUR465m ($575m) cash, it says. The move is another example of a European diversifying in to higher-growth markets, as DSM tries to realign its portfolio towards emerging economies. An adjustment can be made to the purchase price bringing the total to as much as EUR490m, based on the actual 2012 Ebitda results and using the same multiple, DSM says. The deal comes at about 7.75x Ebitda multiple, based on 2012 estimated sales, according to a source familiar with the company. “If they’re going to generate value off of this, they’re going to need strong synergies, top and bottom line,” he says, noting that DSM’s nutrition segment earns 20% margins while Tortuga’s earns 16%. The company still has significant funds on its balance sheet that it doesn’t rule out using for further buys, he adds. The purchase is DSM’s seventh globally since a September 2010 change in strategy to focus on growth in its nutrition segment, the company says. The transaction is expected to be immediately earnings per share accretive, DSM says. Tortuga makes mineral supplements for production animals, selling in over nine countries in LatAm.
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Masisa Adds Mexico Assets
Chilean wood products maker Masisa has agreed to the Rexcel particle board business from Mexico’s Grupo Kuo for $54m plus working capital through the close of the deal, it says. The purchase, which includes a resin plant and several brands, will help Masisa grow its production and technology for resins and coating panels. The transaction is subject to regulatory approval. Masisa plans to fund the deal using proceeds from a planned $100m equity capital raise. It will put the raise to shareholders following regulatory approval. Masisa is also preparing a domestic bond.
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PE Group Plots Paraguay E&P Listing
After combining three of its Paraguayan E&P units into a single entity, private equity firm Dahava Group plans to raise as much as $300m through listings on the Asuncion and London stock exchanges, it says. The firm’s local Dahava Petroleos vehicle holds the Aurora Petroleos, Boreal Petroleos and CDS Energy units, which it has bought over the last two years, spending more than $100m, according to a company official. After proving the units’ reserves, it now plans to raise up to $100m on the Paraguayan bolsa, hiring Valores to manage, and up to $200m on London’s AIM market, via Strand Hanson. The group says the oil assets should help make Paraguay energy independent. Dahava also owns two diamond mines and a black jade operation, as well as oil and gas concessions in Southern Africa.
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Abertis Diversifies with Brazil Road Buy
At a time when many Spanish companies are exiting LatAm, infrastructure operator Abertis is increasing its exposure to the region, through an agreement to purchase control of OHL Brasil in partnership with Canada’s Brookfield. The pair’s joint venture has finalized the deal for control of the Brazilian toll road operation, valued at approximately $1.7bn, in which Abertis receives all of the shares of the Participes en Brasil vehicle which owns 60% of OHL Brasil, in exchange for 10% of Abertis shares, the assumption of EUR504m ($625m) in Participes’ debt and a payment of EUR10.7m. Through Abertis’ agreement with Brookfield, the Canadian asset manager comes away with 49% of Participes, and Abertis with 51%. “Abertis has a very solid cash flow situation, they have no liquidity problems so they do have the cash to do [the investment],” says a European equity analyst covering Abertis. “Europeans are in a bit of a tough position, because some of their best assets are in EM, but that is also what’s liquid today,” says a Brazil-based investment banker, noting that those who have the means will look to increase their positions as those who don’t exit. Through the deal, Abertis broadens its LatAm operations and diversifies away from deteriorating conditions in Spain’s toll road sector. Spanish toll roads should now represent 27% of Abertis’ revenues, down from 43% in 2011, according to the analyst, who notes the deal should be positive for Abertis going forward. Abertis will get a platform from which it can grow in the sector, and Brookfield, which has been present in the market for many years, will help manage the assets, the analyst says, adding that Brookfield has more than $18bn invested there so far. In a report, Credit Suisse values the transaction at 2.5%-8.9% below OHL Brasil’s current market price, calling the deal slightly negative for OHL Brasil. “While we understand the rationale behind the acceptance of this deal by OHL, namely to reduce leverage and improve cred