Mexico-based English school company Harmon Hall is welcoming the IFC, German development bank DEG and HSBC’s LatAm private equity division as shareholders, which together are taking a 40% stake for an undisclosed amount. According to information from the IFC, the new shareholders are investing about $20m, of which the IFC is providing an $8m equity investment. The remaining 60% is held by Mexican PE shop Nexxus, says Nexxus associate Juan Carlos Gavito. He explains that proceeds from the deal will be used to expand the company organically and via acquisitions in Mexico. “We have studied several options already,” he tells LatinFinance. Harmon Hall was established 45 years ago and has 124 schools in Mexico and 2 in Guatemala.
Category: Regions
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Kuo JV Buys US Food Company
MegaMex Foods, a joint venture between US-based food company Hormel and Mexico’s Herdez del Fuerte, which is 50% owned by Grupo Kuo, is acquiring California’s Don Miguel Mexican Foods. Financial terms were not disclosed, but a Mexico-based equity analyst estimates the deal is worth MXP1.6bn ($123m), or about 8.5x Ebitda. He adds that it will be financed with a combination of debt and cash on hand. The sellers are California-based private equity shop TSG Consumer Partners and Don Miguel chairman Steve Charton. Don Miguel, founded over 100 years ago, was acquired by Charton in 1990. TSG invested in the company in 2002. James O’Hara, managing director at TSG says that the shop held a majority stake in Don Miguel, while Charton held a minority stake. He would not disclose how much each held nor confirm the sale price. Piper Jaffray advised the sellers while Chicago-based boutique investment bank JH Chapman advised MegaMex.
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Santander to Issue COP Bonds
The Colombian unit of Spanish bank Santander says it plans to issue up to COP140bn ($77m) in local subordinated bonds rated AA+. The notes will have maturities between 7 and 10 years. The coupons could pay as much as 3.0% over DTF, 6.5% over IPC or a fixed rate as high as 11.0%, according to the prospectus. Proceeds will be used to finance investments. Santander Investments Valores will lead the sale.
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Bank Bonds on Tap
Peru’s BCP is expected to price a $500m plus 2020 bond this week, after the conclusion of investor meetings today. The BBB/BBB minus Peruvian bank is visiting the US and UK with Bank of America Merrill Lynch and Deutsche Bank. Also on the road through today is Brazil’s BNDES development bank, officially on “non-deal” meetings in Europe, though investors expect a EUR-denominated debut. BNP Paribas, Credit Suisse, and Deutsche Bank are managing it. BNDES is rated BBB minus.
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Mexico DCM Pipeline Fills Up
Domestic bond issuance is picking up in Mexico, with Banamex, Infonavit and Televisa expected to issue this week. Banamex is set for a dual tranche MXP7.5bn deal today, with a 7-year floating rate and a 10-year fixed rate tranche on Tuesday. Banamex and Santander are bookrunners on the floater and HSBC, Inbursa and Banamex are managing the fixed rate. The proceeds from the AAA sale will go towards liability management. Government-backed lender Infonavit will meanwhile issue MXP3.5bn equivalent in UDI-denominated RMBS deal. The 2038s pay a fixed rate and have an average life of 4.8 years. Banamex and HSBC are joint leads on the deal, rated AAA on a national scale. Infonavit raised MXP4.2bn in June in a 2038 deal via the same banks, paying 3.90% and 5.05% fixed rates on tranches with different average lives. Finally, Televisa is preparing a much-anticipated debut domestic bond. The broadcaster plans up to MXP10bn in fixed rate notes, expected to price Thursday. HSBC and Santander are managing the transaction, rated AAA on a national scale.
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Road Builder Sees Demand for COP Bonds
Colombian highway operator Concesionaria de Occidente has issued COP162.5bn ($89.3m) in 3 series of domestic bonds, on the back of COP397.5bn total demand, a banker on the deal says. A COP53.0bn 3-year piece rated AAA pays a fixed rate of 6.25%, a COP52.0bn 7-year tranche rated AA+ pays IPC plus 5.28% and a COP57.5bn piece rated AA+ pays IPC plus 6.18%. Proceeds will be used to finance construction of highways and repay and service debt. Interbolsa led the sale. Concesionaria de Occidente is controlled by Colombian builder Conalvias, and is building the 55km Pereira-La Victoria highway in western Colombia.
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No Hookup for ETB
Colombia’s ETB has cancelled its search for a strategic partner, it says, after not receiving any offers from potential buyers by the deadline. The telephone company will present other alternatives to shareholders in a meeting, but does not indicate what it will propose. “We believe the cancellation of the process will have a negative impact on the company,” says local equity research firm Bolsa y Renta, adding that “the process had generated much market speculation and this was reflected in the company’s share price.” ETB, in which the city of Bogota holds an 80% stake, had been exploring a sale since early 2009. Spain’s Telefonica and Mexico’s Telmex had been considered potential suitors. Santander has been its financial advisor. ETB shares closed at COP792 ($0.43), down 27.3%.
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Odebrecht Heads East For Debt Sale
To help revive a perpetual bond sale held over from May, Odebrecht plans to meet investors in Asia Monday and Tuesday, with a $250m deal expected to follow. The Baa3/BB/BB+ rated Brazilian builder is looking to reduce the coupon on its 9.625% perpetual bond by replacing it with a new one. The note is expected to have a similar NC5 step-up structure to the perpetual from broadcaster Globo, which squashed the coupon on its own bond to 6.250% from 9.375% in April. Credit Suisse and Itau are managing the sale for Odebrecht, which met European and US investors in May, before the transaction was shelved due to poor market conditions.
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Bolivian Bank Targets US Investors
The asset management arm of Bolivia’s largest bank hopes to capitalize on growing bullishness towards LatAm by tapping US investors for funds. “Our objective is to bring a concise package to the US market,” Heiner Skaliks, portfolio manager of the Strategic Latin America Fund (SLAF), launched this year by Banco Mercantil Santa Cruz’s asset management arm. “If we are able to tap into a small portion of US investors, that is a significant size for us,” he tells LatinFinance. Skaliks notes that the vehicle is fruit of the bank’s renewed efforts to diversify beyond Bolivia. He claims that the blended fund is the first such entity from LatAm to be offered in the US with exposure to both debt and equity. SLAF has raised $25m and is targeting $1bn over a 5-7-year period. It is 65% allocated to fixed income and 30%-35% equity, he adds. Retail investment is the short-term target, while SLAF will look to bring in institutional money when increased in size. The challenge for a fund based in such a small country is finding distribution channels in the US. SLAF is in talks with investment banks in the US regarding distribution, Skaliks says. He adds that the fund will allocate across LatAm and is industry and country agnostic, favoring exchange-traded securities.
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Copamex to Refinance Debt
Mexican paper producer Copamex has signed a 5-year syndicated loan that will enable it to refinance all its existing debt. The deal, with Rabobank, will have a 3.8-year average life, it says, without offering additional details. In a separate note, Copamex says it plans to repay early the MXP326m remaining principal on its 7.11% 2011 bonds. A finance official did not return a request for comment. Improved funding conditions have led to a lower cost of funding and improved the company’s financing structure, it says.