Fator Aids Nova America on M&A

A source close to one of the companies that has shown interest in acquiring Brazilian sugarcane grower and ethanol producer Nova America says Banco Fator is advising the possible target. So far, some of the companies that have expressed interest are Cargill, Shell, Noble, Cosan and Sao Martinho, sources knowledgeable of Brazil’s sugarcane and biofuel industry say. An industry banker says Nova America has been looking for an investor to take either a stake or buy the company outright. He believes Cargill would be the most likely buyer. “Nova America is having difficulties and is seeking help,” says the banker. He adds that the industry is in consolidation mode and that many non-LatAm companies are actively looking for assets to buy. “There are about 300 different groups that own companies related to sugar and ethanol in Brazil. There will be more consolidation and this will result in more efficient production and delivery,” he says, adding that there are many companies in financial distress, some in Brazil’s equivalent of Chapter 11 bankruptcy. Neither Fator nor Nova America returned calls requesting comment.