Brazil’s HRT Participacoes em Petroleo has agreed to sell its air logistics business, Air Amazonia, to US aircraft manufacturer and operator Erickson Air-Crane, for an expected $65m-$75m, it says. The value depends on the final details of a service contract. The oil and gas explorer will sell its 14-helicopter rotary-wing fleet to Erickson, which will for three years service HRT’s Solimoes Basin operations. HRT says selling the business will increase efficiency by letting it focus on exploration, among other benefits.
Category: United States
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Goldman Looks to Huaso Market
Goldman Sachs is planning a bond sale in Chile’s domestic market, according to regulatory documents, filing for a program to issue up to UF20m ($964m) at maturities of up to 50 years. Though the program is large, individual Chilean domestic deals tend to be under UF5m at 21 years or less. The bank sees a so-called Huaso bond as a way to expand its business in the country, a bank spokesman says. Santander Chile is managing the deal. Goldman is also in the process opening an office in Santiago and has sold some $300m in Chilean peso-denominated international debt since 2006, the spokesman adds. A sale would make it the first US-based Huaso issuer. The most recent foreign bank to issue in the Huaso market was Brazil’s Banco Pine, raising UF1.5m in December.
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AB InBev Hopeful on Modelo Deal
Anheuser-Busch InBev (AB InBev) says it is in talks with the US Department of Justice to resolve the lawsuit seeking to block the purchase of Grupo Modelo, it says, and has asked to suspend the litigation until March 19. The global brewer is hoping its agreement announced last week to sell to sell a Mexican brewery and control of the Corona brand in the US to Constellation Brands for $2.9bn will satisfy regulators. The government is worried that the combination of Ab InBev and Modelo would control too much of the US beer market. Analysts expected that the $20.1bn deal agreed last year to buy the remaining 50% of the Mexican Brewer could proceed following last week’s Constellation agreement.
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Divestiture Seen Rescuing AB-Modelo Deal
Anheuser-Busch InBev (AB InBev) has agreed to sell a Mexican brewery and control of the Corona brand in the US to Constellation Brands for $2.9bn, it says, a move analysts see saving AB InBev’s $20bn deal agreed last year to buy the remainder of Mexico’s Grupo Modelo. In order to appease US regulators, Constellation will take the Piedras Negras brewery and perpetual rights to Corona and the other Modelo beer brands in the US. The price implies a multiple of 9x the expected 2012 Ebitda of $310m, AB InBev says. “This move addresses the [US Department of Justice] concerns surrounding the ABI-Modelo deal as ABI has effectively no involvement or influence over any aspect of the Corona and Modelo brands in the US,” Jefferies says in a note, adding that it now expects the Modelo deal to conclude successfully. The shop calls the multiple “fair.” AB InBev still plans to sell Modelo’s 50% stake in beer importer Crown Imports to Constellation for $1.85bn, as agreed last year. The brewer notes that it now sees $1bn in revenue and cost benefits coming from the Modelo deal, higher than the $600m it had originally expected. In July last year AB InBev agreed to buy the 50% of Modelo it did not own for $20.1bn. The US Department of Justice sued to block the deal in January, on concern that AB InBev would control an unfair portion of the US beer market.
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BBVA Exits Chilean Pension
MetLife and BBVA have put terms on the anticipated sale of the Spaniard’s AFP Provida Chilean pension unit to the American insurer, with the $2bn value generally seen as fair. In the deal, BBVA has agreed to sell its 64.3% of Provida for $1.52bn, and MetLife will tender publicly for the remainder, the two parties say. MetLife will offer holders $6.04 per share for each of the 118m shares making up the public float. Provida holders can also expect another $365m in dividends as a result of the sale. Overall the valuation is seen as fair, and lower than other recent deals in the sector. “The purchase of Provida will enhance MetLife’s business mix by increasing its exposure to faster-growing and higher-return emerging markets,” JPMorgan says in a report, calling the deal “fair” and a “strategic positive.” The shop finds that the deal values Provida at 4.4% of AUM and 11x 12-month earnings. This compares to the 4.7% of AUM and 13x earnings that Prudential Financial paid for AFP Cuprum last year in a $1.5bn transaction, the most recent previous sale of a Chilean pension. BBVA was seen selling its Mexican pension at around 14.5x in October, and selling its Colombian unit at around 13.5x in January. The US insurer says it expects to boost its earnings from EM to 17%, from 14%. As part of a shift to less capital intensive products, MetLife says the deal should be immediately accretive to earnings, at approximately $0.05 per share in 2013 and $0.15 per share in 2014. BBVA expects a EUR500m ($685m) post-tax gain from the sale. The transaction also includes a small asset management business in Ecuador. MetLife is paying cash. BBVA has sought buyers for its pension-fund assets in Chile, Mexico, Peru and Colombia since May of last year. It agreed in November to sell the Mexican operation to Banorte for $1.6bn and the Colombian operation to Grupo Aval in January for $530m. Its Peruvian business remains on the block. Bank of America Merrill Lynch and law firms Sakdden Arps and Prie
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Regulator Challenges Modelo Sale
The US Department of Justice has filed suit to block the $20bn acquisition of 50% of Mexican brewer Grupo Modelo agreed last year, buyer AB Inbev says. The challenge to the deal – LatAm’s biggest announced M&A transaction in 2012 – is mainly based on AB Inbev’s ability to charge consumers more if it controls both the Corona and Budweiser brands, two of the most popular in the US market. At the very least, it is a setback to the parties’ original plans to close the deal by the end of March. After four years of AB Inbev owning an initial 50% of Modelo and long discussions for the other half, the two sides agreed on the deal in July. Morgan Stanley advised Modelo, while Deutsche Bank, Lazard, Barclays, JPMorgan and Bank of America Merrill Lynch advised AB InBev. The move is “inconsistent with the law, the facts and the reality of the market place,” AB Inbev says, vowing to contest the action while noting that closing should be delayed.
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MetLife Negotiating with BBVA for Chile Pension
MetLife is in talks with BBVA to buy the AFP Provida pension business in Chile, it says. The timing of any deal is unclear. The US financial services company had been suspected as a buyer for the four LatAm pension businesses BBVA put on sale last year. Earlier this month BBVA sold the AFP Horizonte in Colombia to Grupo Aval for $530m, and last year sold its Mexican operation to Banorte for $1.73bn. Both the Chilean and Peruvian assets remain on the block. Goldman Sachs has been advising BBVA on the sale process.
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US PE Shop Plans CCD
Acon Investments is preparing to raise private equity funds from Mexico’s pension funds through a certificado de capital de desarrollo (CCD) transaction. Currently raising $300m-$500m for its Acon Latin American opportunities Fund IV, the CCD would have a life of 10 years, extendible to 12, according to regulatory documents. The exact size to be raised from the CCD remains to be determined. Acon will target equity investments in Mexican companies. It expects to pay investors their principal plus an 8% preferred return, followed by the 80%-20% investor-manager split typical in private equity. ING is managing the process, for which the timing is unclear. Founded in 1996, Acon had $966m under management in LatAm through 3Q 2012. About 36% of its LatAm activity is in Mexico, the largest represented country in the region, followed by Brazil with 30%. The US-based global shop has offices in Mexico City and Sao Paulo. Last year, it made a BRL110m ($53m) investment in Brazil’s BSM Engenharia, a service provider to the country’s oil and infrastructure sectors, equal to about 40% of the company.
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Argie IT Firm Gets International Investment
US-based communications services group WPP has agreed to acquire a 20% stake in Argentine IT firm Globant for $70m, Globant says. The firm is present in several LatAm countries and has grown through acquisitions since 2003, boosted by private equity funds from investors including Endeavor Catalyst, Riverwood Capital and FTV Capital. Most recently it has acquired US-based mobile technology firm Nextive and Brazilian developer Terra Forum.
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Ally LatAm Assets Go Back to GM
Ally Financial has agreed to sell its operations in Brazil, Mexico, Colombia and Chile to General Motors, it says, as part of a larger $4.2bn sale of all Ally’s international assets. The total buy, including European and LatAm operations and 40% of a Chinese joint venture, comes at a $550m premium to book value, GM says. The auto lender formerly known as GMAC has been looking to shed the international operations since May. GM owned GMAC until 2006. Sullivan and Cromwell advised Ally on the deal, expected to close in mid-2013, subject to approvals. It follows the $865m sale of Ally’s ABA Seguros Mexico insurance business to Switzerland’s ACE agreed last month.