Ultrapar Participacoes has agreed to acquire Uruguayan specialty chemicals maker American Chemical in a deal valued at $79m, subject to closing and related conditions, it says. Ultrapar subsidiary Oxiteno will use the asset, which includes American’s Montevideo plant, to become a stronger regional player in specialty chemicals and surfactants. An internal M&A team handled the deal for Ultrapar, which is funding the purchase with its own resources. The deal follows a BRL160m ($81m) agreement to acquire the Temmar port terminal in Brazil from Noble Group.
Category: M&A
Posted inDaily Brief
US Industrials Player Moves into Peru
US-based equipment manufacturer Colfax has acquired 91% of Peruvian welding products supplier Soldex from Inversiones Breca, it says. The sale values Soldex at $235m, including the assumption of debt. Colfax, a fluid-handling systems specialist with a welding products business active in several South American countries, is using its own cash for the deal. Soldex has operations in Peru and Colombia. BBVA and Miranda & Amado advised Colfax on the deal, while MBA Lazard and Rebaza, Alcazar, de las Casas advised Breca.
Posted inDaily Brief
Vale Unloads Colombian Coal
Vale has agreed to sell its Colombian coal operations to Colombian Natural Resources (CNR) for $407m, it says. The assets include the El Hatillo coal mine and the Cerro Largo coal deposit, as well as an 8.43% equity stake in the Fenoco railroad consortium, and 100% of the Rio Cordoba port concession. CNR will pay cash, and the deal is subject to regulatory approval. Vale had bought the assets from Cementos Argos in 2009 for $306m.
Posted inDaily Brief
Internationals Continue Targeting M&A
A recent wave of M&A Transactions, most recently Diageo’s purchase of Brazil’s Ypioca, has seen international players look to capitalize on LatAm’s, and specifically Brazil’s, growth story. Continued international strategic investment, also highlighted last week by GE buying a slice of EBX and General Mills taking Yoki Alimentos, should be a theme in the remainder of the year, as should continued European divestment, bankers say. There has been $64.93bn in M&A volume done this year through May 25 from 764 deals, according to Dealogic compared to $64.83bn from 672 transactions in the corresponding period in 2011. “The increase in volume is mainly a result of deals getting moved to this year from last year,” says a senior new York-based LatAm investment banker. He adds that certain large deals have moved the needle this year – the 5.63bn Abu Dhabi investment in EBX and Itau’s move for the rest of Redecard come to mind – but might not be indicative of a true uptick in volume. Still, strategic interest may well push volume higher. International spirits company Diageo agreed to purchase Brazil’s Ypioca Agroindustrial Limitada, it says, for BRL900m ($454m). The move adds the cachaca producer with 8% market share to Diageo’s assets in Brazil, which include the Nega Fulo cachaca and distribution of its well-known global brands including Johnnie Walker, Guinness and Smirnoff. The transaction is expected to be earnings per share neutral in year 1, and profit positive in year 5. Morgan Stanley advised Diageo, which is also negotiating to acquire Mexico’s Jose Cuervo. In another deal, Japan’s Takeda Pharmaceutical agreed to buy Brazil’s Multilab Industria e Comercio de Productos Farmaceuticos for BRL500m cash, the companies say. The move gives one of Aisa’s largest drugmakers a sales network in the country where it already has a commercial subsidiary. Multilab’s owners, Genesio Cervo and Rejane Gobbi, will get as much as BRL40m in additional milestone payments at a later date.
Posted inDaily Brief
Ultrapar Adds Terminal
Brazilian fuel distributor Ultrapar has agreed to acquire the Temmar port terminal from Noble Group, it says, for BRL160m ($80m). Under the terms of the sale, done through the Ultracargo unit, Ultrapar could pay an additional BRL12m-BRL30m, as a result of future storage capacity expansions in the next 7 years. The deal is subject to shareholder and regulatory approval. Temmar is located at the Itaqui port in the state of Maranhao. Over the last four years Ultracargo has acquired the Uniao Terminais at the port of Santos, and another terminal at Suape in the state of Pernambuco.
Posted inDaily Brief
Australians Enter Chilean Mining Project
OZ Exploration Chile, a subsidiary of Australia’s OZ Minerals, has entered into an option agreement to acquire a 90% interest in the Copaquire project from International PBX Ventures for $90.3m, International PBX says. Under the agreement, OZ will make a small initial payment during a first stage of drilling in the copper-molybdenum project in Northern Chile, and be able to pay $10m for 10% in a second stage and $80m for another 80% after the second stage. The agreement is subject to shareholder and regulatory approval.
Posted inDaily Brief
Batista Continues Courting Strategics
Brazil’s EBX continues to generate interest from foreign strategic investors, with a $300m investment from GE, and more is expected on the way. The US-based conglomerate is purchasing a 0.8% stake in Eike Batista’s Centennial Asset Brazilian Equity holding vehicle, the companies say, and is paying a similar price level to that seen in a $2bn sale of 5.63% to Abu Dhabi sovereign wealth fund Mubadala Development Company in April. Bankers say that this type of private, pre-IPO investment is preferable for large strategic investors looking at growth and commodity plays in LatAm, and to the companies themselves during periods of uncertainty in the public equity markets. Sovereign wealth funds and other strategic buyers are being increasingly pitched with these opportunities. “This type of long-term minority real money is healthy [for the region]. The trend is initially financials and natural resources, but it should be followed by other sectors,” says a New York-based LatAm investment banker. He adds that infrastructure should receive much more investment, noting that it is already some of EBX’s makeup, and that some investors, such as Canadian pensions, have been making infrastructure plays for a long time. EBX plans to use proceeds to further enhance its capital structure and finance its pipeline of future investments. The companies claim a previous relationship, which includes GE supplying equipment to Batista companies’ projects. Neither side responded to a request for comment on its advisors. The price paid is proportionally similar to that paid by Mubadala, which at the time was seen implying a $35.5bn valuation for EBX and around a 40% premium to market value, according to some analysts, though measuring them is difficult given that only 5 of the 11 Batista units are public. Batista has publicly announced plans to list shares of gold miner AUX and real estate unit REX, and EBX itself could eventually be floated. Shares of Colombian coal miner CCX are to begin trad
Posted inDaily Brief
BBVA Considers Options for LatAm Pensions
Spain’s BBVA is considering selling all or part of its pension units in Chile, Colombia, Peru and Mexico, it says. Despite the attractiveness of the pension businesses, they don’t have sufficient overlap with the bank’s core consumer banking operations in those countries. The decision follows a trend of European, and particularly Spanish, banks selling down LatAm assets to revamp their capital structures ahead of tighter regulatory requirements. However, BBVA has not been engaging in selldowns to the extent that other banks, such as Spanish rival Santander, have in the past year. The process should last several quarters, and a sale is unlikely to come any time this year, the bank says.
Posted inDaily Brief
General Mills Buys Brazilian
General Mills has agreed to acquire Brazilian food products company Yoki Alimentos, it says. It does not disclose the price paid for the maker of the Yoki and Kitano brands, which booked BRL1.1bn ($542m) in sales in 2011. The two parties did not respond to requests for additional comment. General Mills is already active in Brazil, operating the Haagen-Dazs and Nature Valley Brands.
Posted inDaily Brief
Mexichem Reaches 95% of Wavin
Mexichem has increased its stake in Dutch plastic pipe maker Wavin to 95.7%, it says. Mexichem now will move ahead with plans to delist the company. The Mexican chemicals producer’s EUR10.50 ($13.30) per share offer was declared unconditional May 8, after it clinched 65% of Wavin’s outstanding shares. Mexichem has spent about EUR389 to increase its stake from an initial 22%. It is financing the acquisition with its own cash and through several credit lines.