Category: M&A

Peruvian food and consumer products firm Alicorp has purchased Argentine personal care products manufacturer The Value Brand (TVB) for $65m. The acquisition will be financed through bank debt and is part of Alicorp’s expansion strategy in LatAm that started last year with the purchase of Ecuadorean ice cream maker Eskimo for $10.6m, Anthony Middlebrook, says Alicorp’s investor relations manager. TVB had sales of $100m in 2007, he adds.

Several key LatAm Bear Stearns employees are not joining JPMorgan after the merger. Veteran banker AJ Mediratta, former senior managing director and head of international debt capital markets at Bear, left the firm yesterday. He is expected to resurface at a hedge fund with several former Bear colleagues. Meanwhile, ex-senior managing director Carl Ross – the shop’s well known head of research – is also heard moving on. Both have strong client relationships and were instrumental in building Bear’s Caribbean niche, which JPM hopes to maintain and bolt on to its existing LatAm franchise. Elsewhere, Robert Schmieder, an MD in charge of LatAm corporate fixed income analysis – a growing area that lacks detailed coverage on the sell-side – is also leaving the firm. “It’s tough – we had a great team at Bear,” says one former staffer at the doomed US shop, adding that employment market conditions made it impossible to keep everyone together. Meanwhile, Jose Luis Martinez has joined JPM as executive director in the LatAm investment banking group. The former MD in Bear’s investment banking team has expertise in Central America and Caribbean coverage. Head of trading and senior MD Adam Groothuis – a veteran in the underserved CentAm and Caribbean secondary markets – has also joined JPM. And ex-head of EM mortgage finance John Tonelli is also heard taking a new role at the merged entity.

M&A activity is picking up in Brazil at a brisk pace, with 2008 deal volume on track for a record year, according to Dealogic. But hostile activity – whereby an acquirer makes an unsolicited, often public offer to acquire the shares of its target – is likely to still be some years off in Brazil, according to a panel of bankers and lawyers at a Brazilian-American Chamber of Commerce event Wednesday. “In three to five years, this market will develop aggressively,” says Nicholas Aguzin, head of LatAm investment banking at JPMorgan. “But it’s unlikely that we’ll see any hostile transactions in the next few years.” The reason is primarily the country’s low level of publicly traded stock combined with an absence of shareholder activism that is instrumental in supporting hostile bids. While Brazilian entities have raised upwards of $65bn in the equity markets in the past few years, much of that on the more transparent Novo Mercado, regulatory changes are also still needed. “It is mathematically possible to have a hostile takeover in Brazil,” says Eduardo Boulos, a partner in M&A at Sao Paulo law firm Levy Salomao, referring to the fact that many companies listed on the Novo Mercado have a diverse enough ownership structure to allow it. But so far, there have been no successful such deals – only exclusive, negotiated “friendly” transactions, with the only major attempt – Sadia’s 2006 bid for Perdigao – failing for lack of an attractively priced offer.

Colombian private equity shop Tribecapital Partners has bought a 35% stake in local oil and gas exploration company PetroLatina for $25m. The acquisition was made through Tribecapital’s subsidiary Tribeca Oil and Gas, the firm says. The funds will provide PetroLatina with additional cash resources to cover outstanding liabilities and fund its operations in Colombia, Tribecapital says.

The May 23 Daily Brief “Gerdau Takes Stake in Specialty Steelmaker” incorrectly states the basis for debentures to be issued in the acquisition of Acos Villares. The correct price is TJLP plus 75bp.

Bank of Nova Scotia is beefing up in Peru with the acquisition of 100% of Banco del Trabajo from Grupo Altas Cumbres. “This transaction represents a unique opportunity for Scotiabank to expand in the growing Peruvian micro-enterprise and consumer finance segments,” says Carlos Gonzalez Taboada, CEO of Scotiabank Peru. The merged entity will make Scotiabank Peru the number one bank in the Peruvian consumer finance segment and number two in micro-lending, according to Scotia. It also includes a co-branding arrangement with Jockey Plaza, the upscale mall in Peru. Established in 1994, Banco del Trabajo is the 9th largest commercial bank in Peru, with 132 points of sale and total assets of $430m at the end of 2007, representing 1% market share, says Scotia. The deal awaits regulatory approval.

Mexican retail pharmaceutical group Casa Saba has acquired 100% of Brazilian pharmacy chain Drogasmil for BRL185m. The purchase constitutes Saba’s first acquisition outside Mexico, says Saba. Drogasmil’s sale totaled BRL270m in 2007, the company says. It operates in the populous Brazilian states of Rio de Janeiro, Parana and Sao Paulo. In 2007, Saba had sales of MXP25bn.