Harvest Natural Resources has agreed to sell its 32% stake in a Venezuelan oil exploration project to Indonesia’s PT Pertamina for $725m, it says. The all-cash sale concludes a process that the US-based oil company had initiated in March. In the deal, PT Pertamina acquires the stake in the Petrodelta project, of which PDVSA is a partner, by buying Harvest’s 80% stake in Harvest-Vinccler Dutch Holding BV. Net proceeds are expected to be $525m. The transaction is subject to government approval in Venezuela and Indonesia, as well as by shareholders. The boards of Harvest and Pertamina have each approved the transaction. As of end 2011, the Petrodelta venture controls roughly 194m barrels of oil in 3P reserves, a combination of proved, probable and possible reserves held underground, a 1% decline from 2010, following Harvest’s reserve review.
Category: M&A
Camargo Completes Cimpor Takeover
Brazil’s Camargo Correa has completed the takeover of Portugal’s Cimpor, ending up with 94.8% of the cement maker at the close of a public offer period, Cimpor says. The successful bid concludes a process started in March when Camargo Correa, starting with a 33% stake, bid for the rest, offering up to $2.5bn ($1.97bn), at EUR5.50 per share. At the time of the offering, Camargo’s InterCement unit planned, if successful, to unify all of its cement operations under Cimpor. InterCement would first transfer to Cimpor all of its assets in South America and Angola, in exchange for most of Cimpor’s assets in China, Spain, India, Morrocco, Tunisia, Turkey and Peru. InterCement would then offer those international assets to Votorantim in exchange for its 21.2% of Cimpor’s shares.
Mizuho Gets WestLB Brazil
Mizuho has agreed to acquire WestLB’s Brazilian subsidiary, it says. The company did not respond to request for comment regarding the value, but Japanese and other media reports put it in the neighborhood of JPY30bn ($380m). The deal, which remains subject to regulatory approvals, comes as Germany-based bank WestLB restructures in a plan approved by the European Commission late last year that instructs WestLB to split off its business with savings bank and public-sector clients and gives it the option to sell other segments until June 30. WestLB do Brasil had about $1.5bn in assets as of year-end. Mizuho says the acquisition provides it a local banking platform that will extend its reach in Brazil with both Japanese and non-Japanese customers, specifically in lending and project finance, which have been areas of expertise for the bank.
UK Software Provider Buys Brazil Stake
British enterprise software provider Sage Group has purchased a 75% stake in Brazil’s Folhamatic Group for GBP125m ($197m), it says. It will pay GBP101m upfront and a GBP24m performance-driven earn-out on 2012 targets, and a put and call agreement is in place for 2015 for the remaining 25%, based on 2014 performance. “This appears a well structured deal, and Sage has not overpaid for what could become an important seed asset into LatAm,” says a Deutsche Bank report. It and other shops find an implied 13.4x-13.5x Ebitda multiple. The purchase of a market leader which is accretive immediately was desirable for the company, says a person familiar with the deal, giving a 13x Ebitda multiple for transaction. The deal should be 1%-3% accretive in its first full year, according to analyst reports. Sage sees Folhamatic’s 80% recurring revenue, market access in Brazil, along with the room for growth in the SME market as advantageous to its business, according to the company. Folhamatic founder and CEO Mauricio Frizzarin holds the remaining 25% of the equity. Sage, a software and services provider for SME businesses, was advised by Citi.
US Chemical Specialist Shops in Chile
US chemicals producer Air Products has agreed to acquire a 67.0% stake in Chilean industrial gas producer Indura for CLP451bn ($884m), it says. The transaction consists of CLP351bn in equity and CLP100bn in debt, and implies an enterprise value to Ebitda multiple of 13x, according to Air Products. The deal is to be completed in 2 stages, which the company declines to specify, noting only that the first portion will give it majority control and close in early July, with the second portion closing within twelve months and bringing its ownership to 67%. Air Products plans to fund the purchase with debt sourced from the US market and converted to pesos, and will have a bridge loan available for 3 months which it does not expect to draw down. The move expands Air Products’ Latin America footprint in a high growth market, and is expected to be accretive to its earnings per share starting in FY2013. There is a put option for the founding Briones family to sell the remaining interest, exercisable at fair market value in year 4 and 5. Indura has annual revenues of more than $478m, with operations in Argentina, Chile, Colombia, Ecuador, Mexico and Peru. Air Products has a presence in Argentina and Brazil and a joint venture in Mexico. It did not disclose its advisors.
BNDESPar Takes Renova Stake
The board of Brazil’s Renova Energia has approved the sale of a BRL315m ($153m) stake to BNDESPar, Renova says. In the deal the investment arm of the BNDES development bank will buy 112.4m units at BRL28.00 each. Renova units stood at BRL31.49 Monday. Renova is also preparing a BRL300m debenture sale in Brazil’s domestic market.
Fench Food Group Adds in Mexico
French food services group Sodexo has agreed to acquire Mexican food, meal voucher and card company Servi-Bonos for EUR60m ($75m), it says. The buy will be financed out of the company’s existing cash balance and undrawn credit facilities. It is made by Sodexo’s motivation solutions business, one of the company’s main areas, which includes vouchers, cards and checks for food, restaurant meals, culture and transport. Company officials were unable to comment on the advisors used. The purchase is subject to regulatory approvals. It follows the acquisition of on-site food services and corporate meal voucher system company Puras do Brasil for EUR525m last year.
Second Evaluation Means Redecard Offer Fair: Itau
Itau’s BRL11.8bn ($5.75bn) offer for the remainder of Redecard is in line with an appraisal requested by a minority investor, the bank says. Credit Suisse puts the credit card payment-processor’s value at BRL34.66-BRL38.12, meaning Itau’s BRL35.00 offer is justified by the latest evaluation, ordered by minority holder Lazard Asset Management, after it called a previous evaluation too low. In April Rothschild found the value to be BRL34.18-BRL37.59. Itau, which owns 50% of Redecard, has said it does not plan to increase the price if its offer – launched in February – is rejected. The bank aims to delist Redecard, which held an IPO in 2007. Redecard shares closed Monday at BRL33.35.
Argentina Mine Changes Hands
Canada’s Yamana has agreed to acquire Argentina-focused mining company Extorre Gold Mines, in a deal valued at approximately CAD395m ($385m), it says. The transaction gives Yamana the Cerro Moro gold and silver project, located in Argentina’s Santa Cruz province. Extorre shareholders are to receive CAD4.26 per share – CAD3.50 in cash and 0.0467 of a Yamana common share – for each Extorre common share they own. The price represents a 54% premium to Extorre’s 20-day volume-weighted average price. Though the buy represents only 3% of Yamana’s market capitalization, it could contribute to a multiple of that in cash flow growth, the company says. Extorre says it pursued a sale after a decline in gold mining shares, economic uncertainty and the situation in Argentina meant financing Cerro Moro on its own became too expensive. Yamana was advised by Barclays Capital and CIBC World Markets, and Extorre was advised by Canaccord Genuity. The agreement includes a CAD15m breakup fee. Yamana operates in Brazil, Argentina, Chile, Mexico and Colombia.
Slim Continues European March
Mexico’s America Movil (AMX) is set to pay around $1bn for a minority stake in Telekom Austria (TA), the company’s second large move in Europe this year. Continuing to scoop up assets on the cheap, AMX has agreed to buy 21% in the Austrian telecom from two private investors, and will own 23%. Financial terms were not disclosed, but the stake would be worth about EUR748m ($945m) at the previous day’s EUR8.04 closing price, with some estimates seeing a premium that would place the price tag as high as EUR880m. Shares closed Friday at EUR8.15. “This makes sense for AMX and is the right way to grow – access to core European countries. The exposure to TA provides further upside over Western Europe and could allow AMX to use its expertise in emerging markets to improve operations in the region,” says a European telecom equity analyst, noting AMX has wanted into Europe for some time, but it has always been an issue of price. AMX likely wants to test the waters first and learn from the European market before engaging in a possible larger stake, the analyst adds. “Critics say the European and LatAm models are different and valuations are not very good, but these guys are savvy. AMX has bought everything on this [LatAm] side of the world and volatility is not going to stop the use of cash flow for consumption of cellular and data in other parts of the world,” says a New York-based banker who has worked with AMX. “It remains to be seen what Carlos Slim’s strategy is and how active he wants to manage. The issue with TA is that it is a government owned entity and revenues are under pressure. If his approach is cost cutting it will be difficult because TA has civil servants with protected rights and it will be difficult to fire employees as a method of cost cutting,” says a second telecom analyst. “We welcome America Movil as an investor. America Movil is one of the most successful telecom operators and providers worldwide and we are glad to have a strategic and long-term investo