Category: United States

Brazil’s EBX continues to generate interest from foreign strategic investors, with a $300m investment from GE, and more is expected on the way. The US-based conglomerate is purchasing a 0.8% stake in Eike Batista’s Centennial Asset Brazilian Equity holding vehicle, the companies say, and is paying a similar price level to that seen in a $2bn sale of 5.63% to Abu Dhabi sovereign wealth fund Mubadala Development Company in April. Bankers say that this type of private, pre-IPO investment is preferable for large strategic investors looking at growth and commodity plays in LatAm, and to the companies themselves during periods of uncertainty in the public equity markets. Sovereign wealth funds and other strategic buyers are being increasingly pitched with these opportunities. “This type of long-term minority real money is healthy [for the region]. The trend is initially financials and natural resources, but it should be followed by other sectors,” says a New York-based LatAm investment banker. He adds that infrastructure should receive much more investment, noting that it is already some of EBX’s makeup, and that some investors, such as Canadian pensions, have been making infrastructure plays for a long time. EBX plans to use proceeds to further enhance its capital structure and finance its pipeline of future investments. The companies claim a previous relationship, which includes GE supplying equipment to Batista companies’ projects. Neither side responded to a request for comment on its advisors. The price paid is proportionally similar to that paid by Mubadala, which at the time was seen implying a $35.5bn valuation for EBX and around a 40% premium to market value, according to some analysts, though measuring them is difficult given that only 5 of the 11 Batista units are public. Batista has publicly announced plans to list shares of gold miner AUX and real estate unit REX, and EBX itself could eventually be floated. Shares of Colombian coal miner CCX are to begin trad

FleetCor Technologies has agreed to acquire Brazil’s CTF Technologies for $180m, it says. CTF provides fuel payment processing services for road fleets, ships, mining equipment, and railroads, and claims Bradesco, Itau, Petrobras and Ipiranga as clients. CTF earns revenue primarily from a recurring transaction fee paid by the oil companies who purchase the CTF system for their fleet customers under multiyear contracts. The deal marks an entrance into Brazil for FleetCor, which already operates in Mexico. Georgia-based FleetCor provides fuel and specialized payment products with a focus on the oil industry.

Brazilian-backed private equity firm 3G Capital has sold off a 29% stake in fast food chain Burger King to US investment vehicle Justice Holdings for $1.4bn in cash, it says. Following the deal, the chain will be incorporated in Delaware as Burger King Worldwide, and be delisted from the London Stock Exchange and listed instead in the New York Stock Exchange. The transaction is expected to close in 2 to 3 months. Officials at Burger King could not be reached for comment and a 3G spokesman could not immediately comment. Justice retained Barclays for a fairness opinion on the deal and received M&A advice from Tegris Advisors. Law firms Kirkland & Ellis, Greenberg Taurig and Sullivan & Cromwell handled the legal aspects of the transaction. New York-based 3G, backed by Brazilian billionaire Jorge Paulo Lemann and fellow Garantia founders Marcel Telles and Carlos Alberto Sicupira, acquired Burger King for about $4bn, including assumed debt, in 2010.

Eike Batista’s EBX Group has signed a deal with IBM that includes selling the US company a 20% stake in Six Automacao, EBX’s technology company. The deal also contemplates a 10-year $1bn IT outsourcing contract where IBM will handle EBX’s IT operations, the Brazilian company says. Both companies will also create a center to develop technology solutions for infrastructure and natural resources. EBX declines to say if IBM paid for the 20% stake in its subsidiary or if the stake was given as payment for the $1bn services contract. Officials at EBX decline to comment further and IBM officials could not immediately comment on the details of the deal. If the stake in the EBX subsidiary was agreed as payment for the $1bn contract, this would put a $5bn value on EBX’s unlisted technology subsidiary. The IBM agreement comes just days after Batista sold a 5.63% stake in EBX to the Abu Dhabi sovereign wealth fund, Mubadala Development company, for $2.0bn, a price that valued the group overall at $35.5bn.

Equity International, a Chicago-based private equity firm, has acquired a stake in Brazilian property developer Grupo Tha. The deal gives EI, a firm founded by Gary Garrabrant and Sam Zell, 2 seats on the board of Grupo Tha, it says. An official at EI declined to provide any details of the transaction citing a request from the target company. Grupo Tha has developed more than 2,000 real estate projects across a number of sectors, but mostly operates in the Southeastern part of Brazil. EI typically holds on to investments anywhere between 3 to 7 years and invests an average of $75m in target companies. Last year, the private equity firm paid $75m for an undisclosed stake in Terranum Development, a unit of Colombian real estate developer Terranum, and paid another $58m for a participation in Brazilian self-storage company GuardeAqui. The latest venture into the Brazilian real estate development is largely a bet on the growing housing needs of a burgeoning Brazilian middle class, especially in the country’s industrial south, where Grupo Tha has an important presence.