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.
Category: United States
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.
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.
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.
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.
American Electrical Supplier Makes Peru Buy
Anixter International has purchased Peruvian electrical wire and cable distributor Jorvex, it says, for $56.2m and the assumption of $10.5m in debt. The final price to be paid by the Chicago-based distributor of communication and security products, may also be subject to a net asset adjustment. Annual sales for Jorvex were approximately $115m in 2011, and Anixter expects the acquisition to be immediately accretive to earnings in the second half of 2012. Anixter is already active in Peru and several other Latin American markets. Anixter did not use an advisor, according to a spokesman.
US Developer Eyes CCD
Hines, a Houston-based real estate company, is planning to raise funds in Mexico’s certificado de capital de desarrollo (CCD) market, according to regulatory filings. The transaction, whose target size has not been specified, would create a fund to invest in the development of commercial and residential properties throughout Mexico. The CCD should be 10 years in length, extendable by up to 2 years. The return structure would be similar to other CCDs — principal plus a preferred return, with remaining proceeds divided 70% to investors and 30% to the managers. BBVA and Credit Suisse are managing. Hines has $36bn AUM globally, and has been active in Mexico since 1992. Real estate investment vehicles are expected to boom in the next few years, with investors now having Fibra real-estate income trusts, CCDs and IPOs to choose from. At least three Fibras are in the pipeline, bankers say, following Fibra Uno’s debut for the class. Property developer Vesta is preparing an approximately $300m IPO to price July 18.
Citi Leads DCM at Halfway Point
Citi led the LatAm DCM tables through the end of June, according to Dealogic, followed by HSBC and Itau. The US bank booked $12.6bn in volume from 52 deals in the first half when cross-border and local market deals are considered, ahead of HSBC ($8.2bn from 42) and Itau ($6.9bn from 41). Citi also claimed the lead when cross-border deals only are considered ($7.4bn), and when local market deals only are considered ($5.1bn). “Business has become fungible across product lines in the region, and we move pretty fluidly from one type of issuance to the other. Issuers are pretty agnostic about what they do, they just want the best terms,” Chris Gilfond, co-head of LatAm DCM at Citi, tells LatinFinance. Overall volume in the market remained on a pace to top last year’s record regional total. Cross-border volume in the region reached $54.2bn in 1H 2012, up from $45.3bn in 1H 2011, and marked the highest half-year volume on record, boosted by an aggressive first quarter. Volume with local market deals included was also higher, hitting $79.9bn, compared to $72.9bn in the corresponding period of 2011. “There is a really solid pipeline of business that should get done. It may need to wait a month or two in terms of finding the right window, but I’d expect something like second quarter volume in the third quarter,” Gilfond says. He expects DCM volume this year to exceed 2011’s total, both in terms of cross-border volume and combined cross-border and local market volume. In particular, appetite for global local-currency transactions should return, with deals appearing in between bouts of volatility. Brazil, Mexico and Peru led the region in 1H 2012, accounting for 54%, 22% and 6% of total volume respectively, Dealogic says. Citi also led in terms of DCM revenue, booking $52m, or 16.7% of the fee pool. The bank was followed by HSBC and JPMorgan, with $26m (8.5%) each.
Cielo Expands with US Buy
Cielo has agreed to buy US payment processor Merchant e-Solutions (MeS) for $670m, it says. The Brazilian credit card payment processor was particularly drawn to MeS’s payment platform technology and its potential use in Brazil, rather than to the international expansion. The move offers Cielo diversification and better defense against increasing competition in Brazil’s credit card payment sector, which will remain its major focus. The deal was seen at a multiple of 11x Ebitda, according to remarks from Cielo’s CEO cited in local news and wire reports, and Cielo does not expect to put money into growing MeS in the US. MeS processes more than $14bn per year in transactions, with more than 250 financial institution clients, taking in $124m in revenue for the 12-month period through May 31. The transaction is being financed through Cielo’s own cash generation and prepayment of receivables from issuers, according to a spokesman. Goldman Sachs advised Cielo, and JPMorgan advised MeS.
Petrobras Takes All of Texas Refinery
Petrobras has agreed to pay $820.5m to acquire the 50% that it doesn’t already own in Pasadena Refining Systems, it says, ending a prolonged legal dispute with former partner Transcor Astra over the US asset. In the deal, Petrobras pays Belgium’s Astra, controller of Astra Oil Trading, the value of a put option set in 2009. The option was the subject of a lengthy arbitration process between the two parties, which has now been resolved with the agreement. Petrobras acquired its original 50% stake in the Pasadena, Texas-based refinery in 2006 for $360m.