A Chinese unit of US-based building materials maker Owens Corning has sold Brazilian glass fabrics plant Capivari Fibras do Vidrio for $60m in cash to Shanghai-listed fertilizer and chemical manufacturer, Yunnan Yuntianhua. Equities analysts who cover Owens Corning say the deal is not material. “This is not a significant deal and will have no impact on investors,” says one analyst. Jim Barrett, an analyst with NY-based shop CL King and Associates, agrees. “This was an expected divestiture. It was required as part of Owens Corning’s 2007 acquisition of French building products manufacturer St. Gobain,” he says. The company does not say if there were financial advisors on the sale.
Category: United States
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Alsis Plans CCD Fund
US-based investment firm Alsis is planning to raise between $100m-$150m equivalent from Mexican pension funds. The CCD fund will invest in affordable housing in Mexico, says managing partner David Sanchez-Tembleque. He expects the funds to be raised by the end of April. BBVA Bancomer is handling the transaction. Alsis is also fundraising for a parallel fund, called the Mexico Opportunities Fund, targeting US-based institutional investors. It has already has already closed the first round with almost $38m in commitments from Calpers and OPIC. Sanchez-Tembleque expects to increase that amount to about $50m in the next 18 months. He explains that this is a mezzanine fund that will invest an average of $3m-$6m per project. “We invest in affordable housing developments with 1,000 to 2,500 units where homes are priced between $20,000-$50,000,” he says. The managing partner says that although Alsis will focus on Mexico for the next 2 years, it is also eyeing markets such as Colombia and Brazil to invest in affordable housing. Alsis has about $150m in AUM, and is focused on the Mexico market.
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Coniexpress Buy Seen Positive for Heinz
US-based ketchup maker HJ Heinz’s announcement that it is acquiring an 80% stake in Brazilian peer Coniexpress for a rumored $700m is seen as a positive strategic move by equities analysts who cover the buyer. Coniexpress is the maker of the Quero brand of tomato sauces, ketchup, paste and condiments and holds the top 1 or 2 positions in numerous tomato-based categories in Brazil and the leading position in vegetables, according to Heinz. “I think Coniexpress is a strategic fit with Heinz’s core categories and brings the opportunity to expand Heinz’s brands in Brazil as well as introducing the Quero brand to international retailers like Walmart and Carrefour,” says a New York-based equities analyst. Regarding the price Heinz is said to be paying, another New York-based analyst says that if the rumors are correct, then Heinz should be paying about 18x Ebitda for the target. “Heinz is likely paying a premium given the expected growth in Brazil’s consumer demand,” the analyst says. Heinz, which was advised by JPMorgan, expects to close the transaction in the next few months.
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Concha y Toro Buying US Winery
Chilean winemaker Vina Concha y Toro says it is acquiring California’s Fetzer Vineyards and related assets from Brown-Forman, the company that produces Jack Daniels whiskey, for $238m. A Concha y Toro spokesman tells LatinFinance that to finance the deal, the company has obtained a $125m bridge loan from Deutsche Bank maturing 6 months after the deal closes in April. He does not disclose pricing of the loan. The company will likely issue a bond of no more than $200m to refinance the loan and for working capital. “We still don’t know where we will issue the bond or in what currency,” he says. The buyer will also use cash on hand and existing credit lines, the spokesman adds. Celfin says the price paid implies a multiple of 1.5x sales and 7.6x Ebitda. “We see the deal as a substantial move toward internationalization for Concha y Toro, taking a significant step into the US market,” Celfin says, adding that Fetzer is the eighth largest player in the US wine market. BCI Estudios says the deal is in line with Concha y Toro’s internationalization plans by expanding its presence in key markets and reaffirms the positive perspectives for the company. The acquisition includes 6 wine brands, 429 hectares of owned and leased vineyards in Mendocino County, California, cellars with capacity for 36m liters, 6m liters of inventories, and a bottling plant. Deutsche Bank acted as Concha y Toro’s financial advisor while Rabo Securities and Rothschild advised Brown-Forman, according to the Concha y Toro spokesman.
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CapGold Pushes Shareholders to Reject Timmins
US-based miner Capital Gold (CapGold) has sent a letter to shareholders asking them to vote for the merger with Gammon Gold and to reject the rival offer from Canada’s Timmins Gold. In October, Gammon, also based in Canada, offered to acquire CapGold for $288m or $4.57 per share. The offer came soon after Timmins had offered to acquire CapGold for $275m, an offer CapGold’s board immediately rejected. CapGold has turned Timmons away 4 times. In its letter to shareholders, CapGold says that Timmins “will need to raise an estimated $100m this year to complete the transaction and deliver on capital requirements which will be dilutive to stockholders.” It also says it believes that Timmins’ management does not have substantial operating experience and lacks sufficient depth to execute a transformational merger and to operate the combined companies. “Since there is no cash component to the Timmins offer, this may require that CapGold’s taxable US investors sell Timmins shares to cover tax liabilities arising out of a Timmins/CapGold merger,” it adds. As for Gammon’s offer, CapGold says it represents a 54% premium to the 20-day volume weighted average price on the Amex on the day before the offer was made. It also praises Gammon’s “strong management and operating track record” and “visibility as a mid-tier producer.” Gammon’s financial advisors are Dundee Securities and UBS, while CapGold’s is Comark Securities. Both companies have mining operations in Mexico.
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MDU Sells Transmission Lines for $70m
MDU Resources has sold its interest in 3 electrical transmission lines in Brazil to 2 buyers for $70m. The US-based energy and transportation infrastructure company says the buyers, Brazil power companies Cemig and Celesc purchased 84.4% of its interest in the lines, while a third, Alupar, will acquire the rest over the next 4 years. The acquirers are existing partners in the transmission lines.
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Stefanini Targets US Buy
Brazil’s Stefanini IT Solutions has launched a tender offer for all outstanding shares of common stock in TechTeam. Stefanini made an $8.35 per share tender offer, net of cash, for the US IT outsourcing and BPO company. The per share offer implies an aggregate deal value of $93.44m. TechTeam does not return calls for comment. The Brazilian IT solutions provider’s offer will expire December 10.
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Bimbo Consumes Sara Lee US
Grupo Bimbo will acquire the US bakery assets of Sara Lee for $959m. The deal price is less than the $1.1bn-$1.5bn bankers and analysts had forecast for the unit. However, it does not include Sara Lee’s Spanish or Australian assets, which several analysts had thought would be particularly attractive to Bimbo. Sara Lee owns the Bimbo brand in Spain, for example, which the original Bimbo founding family had sold years earlier and was eventually acquired by Sara Lee. The deal value implies an 8.9x Ebitda multiple on LTM adjusted Ebitda of $108m, above the 7x-8x Ebitda multiple that had been expected, according to analyst reports. Bimbo says it has identified $150m-$200m in potential synergies through operational overlap, which would bring the synergized multiple down to 3.7x EBITDA. Sara Lee refers questions to Bimbo, which does not return calls for comment. BAML is advising Sara Lee, with Bimbo retaining Atlas Advisors. The bank market is getting ready for an associated financing, which would have to launch soon to get done this year. The late 2008 acquisition of Weston Foods’ Eastern US distribution assets by Bimbo included a dual tranche, dual currency $1.7 billion syndicated loan via Bank of America, BBVA, Citi, ING, HSBC and Santander.
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IMG and EBX JV in Brazil
IMG Worldwide, a US-based sports, entertainment and media business, and EBX Group will form a 50/50 JV to pursue sports and entertainment opportunities in Brazil. The new company, to be called IMGX, will consider a broad range of investments. They may include golf and tennis tournaments, volleyball and surfing leagues, stadiums, and sports marketing businesses geared toward the upcoming World Cup and Olympic games, according to an IMG spokesman. Eike Batista, founder and chairman of EBX, a Brazilian infrastructure and natural resource developer, is also investing in the Rio marina, and IMGX may seek to leverage developments there with additional sports and entertainment investments. No advisors were retained on the deal, and IMG did not respond to questions regarding capitalization plans for the new company.
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InBev BRL Debut Fizzes
Anheuser-Busch InBev, which holds the LatAm assets of AmBev, has sold BRL750m in global real-denominated bonds. The international brewer’s Baa2/BBB+ 2015 bond priced at par with a 9.750% coupon to yield at the tight end of 9.875% area guidance, revised from initial 10.000%-10.125%. Demand topped BRL2bn, bankers on the deal say, including EM-focused and high-grade investors with a wide geographic distribution. Barclays, Deutsche and Itau managed the deal. It follows a Brazil sovereign BRL1bn 2028 retap and a BRL575m 2020 issuance by Morgan Stanley, both done last month to fuel surging investor demand for local currency exposure. Bankers, already pitching sovereigns and LatAm corporates with global local currency structures, expect more issuer candidates to emerge among global companies with sizeable LatAm assets.