Cerveceria Costa Rica has agreed to buy North American Breweries for $388m cash from private equity fund KPS, it says. KPS formed the company, which operates the Genesse and Labatt brands in the US, in 2009 when it bought Labatt from Anheuser-Busch Inbev. UBS advised KPS and North American breweries on the sale. The transaction is expected to close by the end of the year.
Category: United States
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ADM Set to Unload Gruma Stake
Archer Daniels Midland (ADM) has reached a preliminary deal to sell its 23.2% stake in Mexico’s Gruma to ASUR chairman Fernando Chico Pardo, according to an ADM spokeswoman. The price was not disclosed, though the 23.2% stake would be worth approximately MXP5.42bn ($418m) at the tortilla maker’s Tuesday’s MXP41.43 closing price. The agreement also includes minority positions in various joint ventures with Gruma and its affiliates, and is non-binding. Bank of America Merrill Lynch is advising ADM. The US agricultural group is currently pursuing a AUD2.7bn ($2.8bn) offer for Australia’s GrainCorp. ADM first bought into Gruma in 1996.
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Swiss Insurer Adds in Mexico
Swiss multiline property and casualty insurer ACE has agreed to buy Mexico’s ABA Seguros from Ally Financial for $865m cash, it says. Mexico’s fourth-largest auto insurer is the latest regional financial asset to change hands, as international and regional players seek expansion and high growth rates. For Ally, the move represents a continuation of the American automotive financial services group’s plan to shed non-core international assets to better focus on US operations. ACE, a longtime operator in Mexico, is seen as better equipped to expand the business as demand for insurance products grows along with the economy.”ACE is in the position where it can add to the capital position [of ABA] if it wants to,” Paul Newsome, analyst at Sandler O’Neil, tells LatinFinance. Though the disclosure on the ABA sale is not sufficient to make a judgment on value, he notes ACE has a strong track record with international acquisitions. ACE says it expects the deal to be accretive to earnings in the first year and to meet or exceed the company’s long-term return on equity target – about 15%, according to analysts – by the third year. Canadians TD and Scotiabank were said to be among the other interested bidders. The transaction is expected to be completed during the first half of 2013 and is subject to regulatory approvals. Spokespeople from both parties decline to comment on the financial advisors. Sullivan & Cromwell were legal advisors to Ally. ACE operates in 53 countries, including Argentina, Brazil, Chile, Colombia, Ecuador, Panama and Peru. It operates ACE Seguros in Mexico, and last month agreed to buy Fianzas Monterrey from New York Life Insurance Company for about $285m. Ally announced earlier this year the intent to seek strategic alternatives for businesses in Brazil, Mexico, Chile and Colombia.
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UnitedHealth Pays up for Brazil Entry
UnitedHealth Group has agreed to pay $4.9bn to buy 90% of Brazil’s Amil Participacoes, the companies say, in a transaction seen as coming at a significant premium. The agreement gives the largest US healthcare operator an entrance into an underpenetrated Brazilian market and control of the country’s largest healthcare organization. The deal for 359m shares comes at BRL30.75 ($15.15) per share, representing a 21.5% premium to Friday’s BRL25.30 close. “This is a high price. We think UnitedHealth must see a large upside,” says a Sao Paulo equity analyst. He sees the transaction coming at 32.4x 2012 price/earnings and 26.4x 2013 p/e, compared to the respective 26.5x and 20.7x levels at Friday’s closing price. The US operator is paying up for an association with founder and CEO Edson Bueno – who keeps a stake and joins United’s board – and his track record in Brazil, as well as for access to a more vertically integrated model than it has in the US, the analyst notes. Both could be useful for future EM expansion as well as making improvements in United’s home market. Raymond James sees the deal at 38.2x 2013 p/e, it says in a report, yielding a 76% premium to Amil’s historical averages. “The valuation is rich for this kind of business, but the growth potential is much better than the US-based options,” Matthew Cofina, an analyst at Morningstar, tells LatinFinance. He notes it could boost United’s margins going forward, and that Brazil is an attractive base for possible additional acquisitions. UnitedHealth will buy Amil in a two-step process, with Brazilian tax benefits reducing the effective cost of the acquisition by $600m to $4.3bn. Following Brazilian regulatory approval expected in 4Q, UnitedHealth will buy 60% percent of Amil’s outstanding shares from controllers. In 1H 2013, it will make a public offer for the remaining 30% percent. Bueno has also agreed to invest about $470m in UnitedHealth stock and hold the shares for five years, with Bueno and partner Dulce Pug
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Swiss Insurer Adds Mexican Surety
Swiss insurer Ace has agreed to buy Mexican surety bond specialist Fianzas Monterrey from New York Life, it says, paying $285m cash. The deal expands Ace’s presence in Mexico, adding to commercial property and casualty, accident and health, and life insurance operations. The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to be completed during the first quarter of 2013. New York Life is shedding Fianzas, which it bought in 2000 from Aetna and Bancomer, because it is a non-core business. Established in 1943, Fianzas provides guarantees on construction and industrial projects, and is Mexico’s second-largest surety provider. Goldman Sachs advised New York Life.
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US Manufacturer Agrees to Chile Buy
Cleveland, Ohio-based Eaton Corporation is poised to acquire Chile’s Rolec Comercial e Industrial, subject to closing conditions, the company says. Rolec is a 73-year-old family business with 630 employees, according to a source familiar with the business. It makes integrated power assemblies and switchgear, with products used in Chile and Peru for mining and other industrial applications. Eaton, meanwhile, cites Rolec’s relationships as valuable to its growing business in Chile and Peru in sectors such as mining, pulp and paper, and energy infrastructure. “We are excited to add Rolec’s capabilities to our expanding operations in South America,” says Rich Stinson, president, Power Distribution for Eaton’s Electrical Americas Region, in a statement. Eaton had 2011 sales of $16.0bn.
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US Manufacturer Lines up Bancomext Funds
US vehicle manufacturer Navistar has signed a $95m trade receivables facility with Mexico’s Bancomext, it says. The 5-year facility, done though Navistar’s Mexican unit, will support the sale of trucks and busses manufactured in Mexico and exported to Latin America. A spokeswoman did not comment on the rate, noting only that it is in line with Navistar’s other export financing.
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Latam Airlines Lands Exim-Backed Bond
Latam Airlines Group has issued $288m in bonds guaranteed by the US Export-Import Bank. Issued through the Caroboa Leasing vehicle, the 2024 bonds with a 6.19-year average life priced at par with a 1.829% coupon, or MS+67bp, pricing inside of 70bp-75bp guidance. Proceeds from the issue will help the company formed from the fusion of Chile’s Lan and Brazil’s Tam fund the purchase of two new Boeing aircraft. Credit Agricole and Goldman Sachs managed the sale, aimed at US high-grade accounts and rated AAA. Mexico’s Pemex has taken advantage of US Exim guarantees to issue $1.2bn in the US market at lower rates in the past two months.
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VC Partners Close Brazilian Fund
Sao Paulo-based venture capital firm Redpoint e.ventures has closed a $130m, Brazil-focused fund aimed at investing in startups. The firm is a JV between US-based venture capital firms e.ventures, formerly known as BV Capital, and Redpoint. The fund, its first is managed by founding partners Yann de Vries and Anderson Thees. The fund targets investments in the areas of consumer Internet, e-commerce, mobile, media and cloud services. The fund already includes 5 active investments – Viajanet, Grupo Xango, 55Social, Shoes4you and Sophie & Juliete – that the two firms had made together prior to the creation of the JV.
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Chevron to Provide Loan for Vene JV
PDVSA and Chevron have agreed to terms for a $2bn financing for their Petroboscan joint venture, PDVSA says. The US oil producer is providing “long-term” loan at a rate of Libor+4.5%. It does not state the exact tenor, but says the last payment is scheduled for 2025. Petroboscan, operated by the two since 2006, plans to use the proceeds for increasing oil production in the Boscan oil field. The parties involved did not respond to request for additional comment.