Valeant Pharmaceuticals International has agreed to acquire certain assets from Mexico’s Atlantis Pharma for $71m cash, it says. The Canadian company, which has existing Mexican operations, picks up branded generic products sold in Mexico, a spokeswoman says, without elaborating further. Atlantis’ portfolio includes brands in the gastro, analgesics and anti-inflammatory therapeutic categories. The transaction is expected to close in the second quarter, subject to certain closing conditions including regulatory approvals, and is expected to be immediately accretive, Valeant says. Valeant does not typically use advisors in its deals, the spokeswoman says.
Category: M&A
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Swedes Get Remainder of Chilean Tissue Maker
Swedish hygiene and paper company Svenska Cellulosa (SCA) has agreed to buy the 50% it does not already own in Chile’s Papeles Industriales (Pisa), for about SEK520m ($77m), it says. SCA bought the first piece of SCA in 2003, and has since been expanding in LatAm, most recently with the $70m purchase of Pro Descart in Brazil last year. Pisa specializes in tissue and hygiene products, and distributes incontinence care products under SCA’s Tena brand. SCA has a presence in Mexico and several Andean countries.
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AmBev Boosts Expansion with Dominican Buy
Companhia de Bebidas das Americas (AmBev) has agreed to spend $1.24bn to acquire a 51% position in Cerveceria Nacional Dominicana (CND), the largest brewer in the Dominican Republic, it says, through 2 deals seen as AmBev gaining another local brand with expansion potential. AmBev has agreed to pay $1bn cash to form a joint venture with CND parent E Leon Jimenez (ELJ), which owns 83.5% of CND, giving the international group a 41.76% indirect stake in the brewer of the iconic Presidente brand. Separately, AmBev has agreed to pay Heineken $237m for the Dutch brewer’s 9.3% interest in CND, giving AmBev a total 51.06%of CND. “This isn’t cheap, but it is focusing on the potential of the market, plus synergies. There is a potential to take the brand to other markets,” says a New York-based beverage analyst, noting the implied13x enterprise value/Ebitda given by Ambev is at the high end of the range but not expensive. Though the Dominican Republic is not a large market, the analyst also points to AmBev’s strong track record at capturing synergies and taking local brands regional or global. Analysts point to a 12x-13x average multiple for EM M&A deals in the sector, noting that LatAm assets tend to be at the expensive end due to strong growth potential. “This is a defensive move, to keep other international companies from taking LatAm market share,” says a Brazil-based analyst. AmBev says the transaction should be earnings per share accretive in the first year of operations. CND will continue to operate under its own name, with Franklin Leon as president and Alexandre Medicis as CEO. The parties will enter into a shareholders’ agreement, in which Ambev will nominate 5 members to the holding company’s board and ELJ will nominate 4, among other provisions. The combined operation will sell beer, malt and soft drinks in the Dominican Republic, Antigua, Saint Vincent and Dominica, as well as export drinks to 16 other countries. Deutsche Bank and Lazard advised AmBev, while Bank
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Canadian Mines Mexican Gold Assets
Endeavour Silver has agreed to acquire 100% of the El Cubo mine and the Guadalupe y Calvo project in Mexico from Aurico Gold, for $250m. In the deal, Endeavour is to pay $100m cash and issue $100m in shares upon completion of the acquisition. In addition, Endeavour will pay $50m upon the occurrence of certain events over a period of 3 years from the date of acquisition. El Cubo is a 8,144 hectare gold and silver mine 10km from Endeavour’s existing project in the Guanajuato mining district in central Mexico. Guadalupe y Calvo is an advanced exploration gold and silver project in Chihuahua state. The transaction value implies $8.04 per inferred resource of silver and $409.8 per inferred resource of gold, Endeavour says. Koffman Kalef advised Endeavour and Dundee Capital Markets and Fasken Martineau DuMoulin advised Aurico.
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YPF Nationalization Plan Put in Motion
Argentina has followed through with plans to take control of oil company YPF, sending congress a bill to nationalize 51% of the oil producer and issuing a presidential decree establishing immediate temporary government control, according to wire and local news reports. An Argentine court is to determine how much the authorities would have to pay for the stake, and the current board of directors will be removed. “While in the short term we could see higher investment and oil production, over the medium term we see the creation of another public controlled company as deleterious to overall macro efficiency given the likely mix of commercial and public policy objectives,” Goldman Sachs says in a report. It notes that paying for the nationalized shares will add an extra fiscal burden for a country that still lacks access to conventional and stable sources of non-inflationary financing. Goldman expects the bill to pass in congress. “We think that it is likely the government will attempt to pay for the company its book value, which stands at $4.3bn as per YPF’s latest balance sheet. If this prognosis materializes, then it is likely Repsol will take the case to international arbitration,” Citi says in a report.
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Camargo Offer too Low for Cimpor
A recent takeover offer from Brazil’s Camargo Correa is too low and undervalues Cimpor, Cimpor says. However, the Portuguese cement company also finds that the offer, made at the beginning of the month, lacks enough detail for the company’s board to say whether minority holders should accept it or not. In addition to lacking a premium, Cimpor finds the offer is unclear on what would happen to Cimpor’s asset portfolio, debt profile and dividend policy. Acting through its InterCement Austria unit, Camargo Correa offered to pay EUR5.50 per share for the 444m (66.75%) shares it doesn’t own in Cimpor, implying a maximum of EUR2.4bn ($3.2bn). The Brazilian conglomerate says it aims to further both its own and Cimpor’s international expansion, and to continue to build a balanced portfolio between mature markets and markets with high growth potential. It would also seek to merge InterCement’s cement and concrete assets in South America and Angola with Cimpor. Santander and Lazard are advising Cimpor.
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Colombian Oil Unit Changes Canadian Hands
Canada’s Parex Resources has acquired TargetCo, the Colombian unit of Bermuda-based Nabors Industries for $73m cash, it says. The transaction gives Parex exploration licenses that span 567,000 gross acres in the Llanos and Magdalena basins, and is to be funded from its working capital. Target produces approximately 100 barrels per day from the middle Magdalena basin, where it has 2 exploration blocks. It has 5 exploration blocks the Llanos basin. RBC advised Parex.
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Argentina Ups Ante with YPF Takeover Plan
Though effects of Argentina’s plan to acquire a majority position in oil producer YPF have largely been priced in by the markets, the effects of the action should have a much broader reach, analysts say. The government is preparing legislation declaring 50.1% of YPF’s shares public property subject to expropriation, according to a draft of the legislation published in local media. A formal announcement was expected by President Kirchner as soon as late Thursday night. “This is the worst case scenario for YPF and for Argentina. The government can do a lot to hurt shareholders and this will certainly delay the development of shale opportunities in Argentina,” a New York-based equities analyst says. The legislation also expands the government’s powers across the hydrocarbon sector. Whether a sale price would be open to negotiation with Argentina’s Grupo Petersen and Spain’s Repsol – the holders who stand to lose shares – or whether a tag-along offer would be made to minority holders, was not immediately clear. “At the end of the day this means they are ousting the present management. It seems this is a mixed corporation closer to Petrobras or Ecopetrol than to the PdVSA model. Now we need to see what this will mean for the company’s pursuit of returns,” Emerson Leite, equities analyst at Credit Suisse, tells LatinFinance. The company will likely distribute less in dividends and if it moves to reinvest that money that may theoretically be good, he explains, but state companies tend to be less efficient. The nationalization is certainly not helpful to attract investment for the development of shale opportunities, he says, as it creates anxiety and uncertainty among investors. “This ups the Ante. Argentina has long had an environment seen as unfriendly to business, but this is a step beyond,” says Boris Segura, strategist at Nomura, tells LatinFinance, noting that the effect is mostly, but not completely, priced into Argentine bonds. The markets had largely anticipated th
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Cosan, BG Discuss Comgas Sale
Brazil’s Cosan is in discussions with BG Group about buying BG’s stake in Brazilian gas distributor Comgas, it says. UK-based BG owns 60% of Comgas. Such a move would fit in with Cosan’s strategy of expansion into distribution and logistics. In recent years, the sugar and ethanol producer has formed a fuel distribution venture with Shell, created the Rumo Logistica ethanol transport unit, and recently acquired a stake in railroad operator America Latina Logistica.
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Corpbanca OKs $650m Raise
Shareholders of Chile’s Corpbanca have approved a $650m capital increase, in a needed step to finalize the December acquisition of Santander’s Colombia unit, Corpbanca says. The capital increase will result in the issuance of 48bn new shares that Corpbanca hopes to sell between May and June, an investor relations official says. Corpbanca plans to begin a road show in May and expect to have obtained the funds by the end of June. The capital increase comes as a prerequisite to finalizing the acquisition of Santander’s Colombia assets, first announced in early December. As agreed, Corpbanca is acquiring a 95% stake in of the Santander unit in Colombia for $1.16bn, a transaction with an implied multiple of roughly 2.7x book value.