CFR Pharmaceuticals has agreed to acquire Colombia’s Laboratorio Franco Colombiano (Lafrancol), it says, in a $562m buy that is uncharacteristically large for the expanding Chilean, and makes it the largest pharmaceuticals company in Colombia. The deal, to be funded with cash and an unspecified amount of debt, is another example of dominant Chilean players expanding across the Andes, with CFR already claiming the position as the largest pharmaceutical company in Chile and Peru. “This acquisition is very significant, and we believe is the last one for CFR’s expected inorganic expansion plan. The acquisition is actually the largest one in the history of Latin America in the pharmaceutical industry. The Colombian market is huge, with more than 48m people, and Lafrancol is the largest laboratory in the country,” Javier Gunther, equity analyst at IMTrust, tells LatinFinance. CFR had been making smaller buys, but a larger one was expected given what the company said about its plans at the time of last year’s IPO, Gunther says. The transaction represents 2.8x EV/revenue, according to a person familiar with the transaction, based on about $200m in annual revenue, noting that the multiple is in line with recent deals in LatAm. Multiples have gone up in the sector, says the person, but that makes sense given the growth opportunities. In the case of CFR, its purchase brings cost and revenue synergies and expands beyond CFR’s previously small Colombia footprint. Higher multiples also mean families likely give more consideration to selling their businesses. He expects continued consolidation in LatAm as larger pharmaceutical companies continue seek growth in fragmented markets. The sale is expected to close before the end of the year, pending regulatory approvals. CFR was advised by Deutsche Bank and law firm Honorato, Russi & Eguiguren, and Lafrancol was advised by Estrategias Corporativas and law firm Brigard & Urrutia. CFR raised $368m-equivalent in an IPO last year, and last
Category: Regions
Helm Weighs Options
Owners of Colombia’s Helm Bank are in talks about alternatives for the bank, the bank says, responding to recent speculation regarding a sale. The institution “is continuing in the process of evaluating different alternatives for the bank with none having yet resulted in a definitive transaction,” it says. With several Colombian FIG assets changing hands at high multiples this year, Helm has been the target of many acquisition rumors in the local and international press, most recently by Chile’s Corpbanca, who bought Santander Colombia in December for $1.16bn.
Peruvian Preps DCM Debut
Peru’s Maestro is heard preparing what would be its debut sale in the international bond markets, and hiring Bank of America Merrill Lynch and JPMorgan for the transaction. Additional details of the hardware and home improvement retailer’s deal are unclear, though recent first-timers of its size from Peru have generally raised up to $500m at up to 10 years. Created in 1993, Meastro operates approximately 20 stores, mostly in Lima but with an expansion plan for other parts of the country.
Bachoco Roadshows MXP Debut
Mexican poultry producer Industrias Bachoco is roadshowing this week for a MXP1.5bn ($114m) transaction that would be its first in the domestic bond market. The notes will pay a spread to the 28-day TIIE, and have a tenor of 3 or 5 years. The deal is expected to be rated AA/AA+ with proceeds destined to refinance existing debt. Banamex is leading the transaction. Industrias Bachoco operates poultry production and distribution facilities throughout Mexico. Aside from breeding, processing and marketing poultry, it also produces and distributes eggs, swine, and animal feed. Last year it acquired privately-held Arkansas-based poultry producer OK Industries for $95m.
Facileasing Plots Local Debt
Mexico’s Facileasing has filed to issue debt in the domestic market, according to a regulatory filing. Transaction details were not disclosed for what would be the second issuance under a MXP10bn ($761m) program. In February, Facileasing priced a MXP500m 2015 at TIIE+70bp, marking the fleet leasing company’s first bond offering since being acquired by BBVA Bancomer. BBVA Bancomer is managing the new sale. Facileasing is rated AAA on a national scale.
Geo Sounds Out Huaso Market
Mexico’s Corporacion Geo has finished a series of investor meetings in Chile as it determines if it is the right time to issue bonds in the so-called huaso market. With a $100m-eqivalent bond shelf recently approved, the homebuilder could look to issue in the coming weeks if markets look attractive, say sources familiar with the process. It finished meeting investors last week. Geo is targeting 10-year UF-denominated bonds in what would be its first deal in Chile and the first bond from a foreign issuer in Chile, since 2010. Proceeds would be used for refinancing debt, but there’s no rush to get it done, says a person familiar with the company’s plans, noting that timing is flexible. Santander is managing the deal, rated BBB/BBB on a national scale.
Rubiales Ups Port Investment
Pacific Rubiales has purchased an additional $50m stake in Pacific Infrastructure, it says. The Canadian and Colombia-listed oil company purchased 50m shares at $1.00 per share. The addition follows an initial $38m purchase in March of shares in the Panama-based developer of the Puerto Bahia port complex in Cartagena and a pipeline linking it with Covenas. Pacific Rubiales now holds 44.1% of Pacific Infrastructure, and has the option to purchase $70m more at the same terms.
Petrotemex Gets 56% in Tender
Mexico’s Petrotemex has received acceptance from holders of $154m, or 56.06%, of its 9.50% 2014 bonds targeted a tender offer, it says. The Mexican petrochemical company’s acceptance rate at the August 10 deadline was only slightly higher than the 55.84% it had at the July 27 early deadline. Petrotemex offered holders $1,100 cash per $1,000 principal amount tendered. Holders who tendered by the early date received an extra $30 per $1,000.The company also obtained consents to amend the indenture relating to the existing notes, eliminating all of the company’s restrictive covenants. JPMorgan managed the process. The 2014 bonds were originally sold for $200m in 2009, and later reopened for $75m that same year, at an 8.832%yield. The bonds were trading at 111.5-112.5 in price Monday, according to a trader.
Credit Agricole Preps MXP Bond
Credit Agricole is preparing to sell floating-rate bonds in Mexico’s domestic market, according to a regulatory filing. The bonds will represent the second issuance from a MXP10bn program, and pay a spread to spread to the TIIE benchmark. Proceeds are to be used for general corporate purposes. Banorte Ixe and BBVA Bancomer are managing the sale, done through the Credit Agricole CIB Productos Financieros unit and guaranteed by Credit Agricole Corporate and Investment bank. Credit Agricole was last in the Mexican market in 2010,when it priced a 3-year floater at TIIE+30bp.
Masisa Set for Roadshow
Chile’s Masisa expects to start a roadshow Tuesday for a domestic bond issue of up to UF2m ($94m), expected at the end of the month or in early September. The board products manufacturer can choose from a 5.00% 2017 bullet bond and a 5.30% 2033 note with a 10-year grace period. Proceeds would refinance existing debt. BCI and Scotia are leads on the deal, rated A minus on a local scale. Masisa is also heard looking next year to the international markets as an option for additional refinancing. Earlier this month, Masisa agreed to acquire the Rexcel particle board business from Mexico’s Grupo Kuo for $54m plus working capital through the close of the deal.