Brazilian healthcare company Qualicorp has agreed to acquire the Padrao Group, an insurance broker, in a transaction worth BRL180m ($98m), it says. Qualicorp executed a purchase agreement through which it bought 25% of the Padrao Group companies from Mauro Luis Lapa e Silva and also bought Voloto Consultoria Empresaria, a holding company that controls the remaining 75% of Padrao, from Ocimar Lima Duarte. With the acquisition, Qualicorp builds on its plan to enhance its business in the affinity group health plans business. Officials at Qualicorp did not comment further on the deal, while Padrao officials did could not immediately be reached. Padrao is a manager of benefits and services broker for insurance plans in the affinity group health segment. The deal remains subject to approval from Brazilian regulators. Qualicorp is scheduled to hold an equity follow-on of more than BRL600m next week, though it will not raise any new money in the all-secondary share sale.
Category: M&A
Credicorp Eyes Chilean Brokerage Buy
Credicorp, the holdco for Banco de Credito del Peru, is currently in talks to acquire a controlling stake in a Chilean brokerage, part of a strategy to expand its presence in the region, it says. Credicorp has been negotiating details of the deal, including the valuation, for two months now, an investor relations officer says, and no date is set yet to reach a conclusion. As things stand, Credicorp is looking to buy a 51% in a brokerage, the name of which Credicorp officials refuse to reveal. The Credicorp official declines to discuss an amount to be paid for the brokerage, but notes that the bank is seeking to expand its business to neighboring countries following the business of Peruvian countries that are now venturing abroad. Banco de Credito del Peru recently acquired a majority stake in Colombia’s Correval.
Peruvian Cement Producers Ponder Merger
Peru’s Cementos Lima is pondering a potential merger with its counterpart Cemento Andino, also a Peruvian company, and has hired Citi to advise on the potential deal, it says. Citi is expected to value both companies to better gauge an appropriate exchange of shares for merger purposes. Officials at Cementos Lima could not immediately comment. A spokesman for Cemento Andino declined to offer any details of the potential deal. Talks between the companies emerge at a time of some capital markets activity for the Peruvian cement sector. In early February, Cementos Pacasmayo, a competing peer of Andino and Lima’s, made its ADR debut with a $264.5m equity follow-on. Many observers see a potential upside for the sector given the Andean country’s growth prospects.
Redecard Valuation in Line with Itau Offer
The BRL35.88 per share independent valuation of Brazilian credit card processor Redecard is in line with Itau’s BRL35.00 offer made for the company in February, according to analysts. The finding by Rothschild, hired by minority Redecard holders, leaves little room for Itau to increase its offer price, Deutsche Bank says, calling it fair and recommending that minority holders accept. Citi and BR Partners are set to issue a fairness opinion on Rothschild’s valuation report, Deutsche says, which should be performed over the next 2 weeks. This would be followed by a final tender offer from Itau. “Whether or not Itau will be successful in the tender offer we think the above concerns mean that a large pricing power held by the controlling shareholder make it more difficult for minorities to argue for a better price in this negotiation,” Barclays says. Barclays expects the tender to take place and Itau to end up buying most of the Redecard free-float, if not all, even if it is less than the minimum two-thirds required to de-list Redecard. Itau has offered to purchase 336.4m Redecard shares, or 49.985% of the company, for BRL35.00 per share, with the intention to delist it. Itau is advising itself in the process.
EBX Inks IBM IT Agreement
Eike Batista’s EBX Group has signed a deal with IBM that includes selling the US company a 20% stake in Six Automacao, EBX’s technology company. The deal also contemplates a 10-year $1bn IT outsourcing contract where IBM will handle EBX’s IT operations, the Brazilian company says. Both companies will also create a center to develop technology solutions for infrastructure and natural resources. EBX declines to say if IBM paid for the 20% stake in its subsidiary or if the stake was given as payment for the $1bn services contract. Officials at EBX decline to comment further and IBM officials could not immediately comment on the details of the deal. If the stake in the EBX subsidiary was agreed as payment for the $1bn contract, this would put a $5bn value on EBX’s unlisted technology subsidiary. The IBM agreement comes just days after Batista sold a 5.63% stake in EBX to the Abu Dhabi sovereign wealth fund, Mubadala Development company, for $2.0bn, a price that valued the group overall at $35.5bn.
Brazilians Sell Burger Stake
Brazilian-backed private equity firm 3G Capital has sold off a 29% stake in fast food chain Burger King to US investment vehicle Justice Holdings for $1.4bn in cash, it says. Following the deal, the chain will be incorporated in Delaware as Burger King Worldwide, and be delisted from the London Stock Exchange and listed instead in the New York Stock Exchange. The transaction is expected to close in 2 to 3 months. Officials at Burger King could not be reached for comment and a 3G spokesman could not immediately comment. Justice retained Barclays for a fairness opinion on the deal and received M&A advice from Tegris Advisors. Law firms Kirkland & Ellis, Greenberg Taurig and Sullivan & Cromwell handled the legal aspects of the transaction. New York-based 3G, backed by Brazilian billionaire Jorge Paulo Lemann and fellow Garantia founders Marcel Telles and Carlos Alberto Sicupira, acquired Burger King for about $4bn, including assumed debt, in 2010.
Colombian Makes Exxon Deal
Canacol Energy and its partner Vetra Energia have sold a 50% stake in the VMM2 exploration contract in Colombia to ExxonMobil, in a farm-out agreement worth approximately $50m. As part of the agreement, Exxon will finance the drilling and testing of 3 wells; $15m each for the initial 2 wells and a cap of $17.5m for the third well in case a horizontal drilling approach is required, Canacol says. Exxon will pay Canacol an additional $2.2m to cover prior seismic study costs. A Canacol investment relations official says no advisors were involved in the deal and notes that Vetra will remain as operator of the block, but Exxon could take over in the future. The VMM2 holds a gross acreage of 75,610 acres and is located in the Middle Magdalena basin, an area with a large potential for unconventional shale oil reserves. Following the deal, Vetra will keep a 30% stake, while Canacol will hold 20%.
HRT Seeks Namibia Partners
Brazilian oil and gas company HRT Participacoes em Petroleo is seeking partners for a farm-out agreement involving its exploration assets in Namibia. HRT aims to sell a 25%-30% stake in participation in 10 exploration blocks in the Walvis, Orange and Namibe off-shore basins, an HRT investor relations official says. The final stake to be sold, however, will depend on the eventual negotiations with companies interested, who are now reviewing the project’s data. The data room stage is expected to last up to 3 months, the official says, followed by negotiations which should reach a conclusion sometime in 4Q 2012. The farm-out should bring in a partner willing to finance the exploration of a number of blocks. HRT has retained Citi as the sole advisor in the process.
Telefonica Cleans Up Balance Sheet with Colombian Merger
Spain’s Telefonica has struck a deal to merge its Telefonica Moviles Colombia unit with Colombia Telecomunicaciones, a company itself majority owned by Telefonica, the company says. A key catalyst for the merger is Telefonica’s attempt to cement its balance sheet, which would see a reduction in net debt of EUR1.3m ($1.7bn), Telefonica says. The merger will result in Telefonica controlling 70% of the merged entity with the Colombian government holding the remaining 30% stake, with a right to increase that stake by 3% in 2015. Currently Telefonica owns a 52% stake in Colombia Telecomunicaciones with the government holding the rest. As planned, the deal would involve the Colombian government assuming its 48% share of the telecom company’s debt obligations and extending the payment date of other outstanding debt held by the Patrimonio Autonomo Receptor de Activos, Parapat, until 2028. Officials at Telefonica in Madrid could not comment further on the transaction. The merger will become effective once shareholders from both companies vote on the plan on April 24th.
Xstrata Sells Chilean Generator
Global miner Xstrata has sold off a 51% interest in Energia Austral, a hydroelectric development in Chile, to Origin Energy. The deal contemplates Origin Energy’s coverage of an initial $75m in development costs to complete a detailed project study, plus an additional $75m for final investment, Xtrata says. The deal also involves additional deferred payments to Xstrata when certain operational thresholds are met by Origin Energy once the project is operational, but details were not released. Officials at Xstrata declined to offer additional information on the deal, while Origin Energy officials could not immediately be reached for comment. Energia Austral hydroelectric projects comprise 3 plants, to provide roughly 1,000MW of power to the Chilean grid. The projects are now in the phase of a feasibility study and a final investment is scheduled for as late as 2016.