Travelers, the US property and casualty insurer, will acquire a 43% stake in J. Malucelli Participacoes from parent company Parana Banco for $370m. Parana will continue to hold 57% of the surety insurance subsidiary, though Travelers has the option to increase its stake to 49.9% within 18 months for the same price it paid for its initial stake, indexed to CDI. The deal implies a pre-money valuation of BRL925m for the unit, according to a spokesman. Greenhill advised Travelers, while Malucelli used BTG Pactual, the spokesman adds. According to the company, Travelers’ investment in newly issued shares will significantly increase J. Malucelli’s capital level, allowing it to fund further expansion. Management at Malucelli will stay in place, though Travelers will take several board seats, according to an investor conference call.
Category: United States
Debt Payments Bring Univision to Table
Univision’s need to extend its debt load likely played role in bringing it to the negotiating table with Televisa, says Enrique Senior, MD at Allen & Co, which advised the latter on its buy. Univision has approximately $8bn in debt coming due in 2014 from its original sale in 2006, with about another $2bn maturing in 2015. Meanwhile, its programming license agreement with Televisa, which provides 90% of Univision’s prime time content, expires in 2017. “I don’t think any bondholder would have extended past 2017 without those agreements in place,” Senior says. Univision also commands sole US distribution rights to Televisa content. With a more attractive fee structure in place, analysts estimate that Televisa can expect to monetize significant portions of its media library in the growing US market. “The US marketplace is of paramount importance to Televisa’s strategy of expanding our reach beyond Mexico and maintaining our leadership as the leading media company in the Spanish-speaking world,” says Alfonso de Angoitia, EVP at Televisa. “Accordingly, we have been working diligently to realize the value of our content in the US. We are confident that this investment in Univision achieves our objectives while positively improving our financial results from day.”