Hypermarcas Fuels M&A Run with Equity

Brazilian consumer brands specialist Hypermarcas plans to return to equity markets to raise BRL1.25bn more for M&A. It is back less than a year after last July’s BRL800m follow-on. Hypermarcas has skipped some steps usually taken by follow-on issuers by announcing the deal with a prospectus that already includes a price date of March 31. The company plans to issue 43.5m common shares plus a potential 15% greenshoe of 6.5m units and a 20% hot issue of 8.7m. The deal, if priced at the BRL21.32 per share closing price of March 1, it could raise BRL1.25bn, says Hypermarcas. Citi is leading the offer, with Credit Suisse as stabilizing agent, as well as BofA-Merrill and Itau BBA. The company appears to be looking to benefit from strong credibility it has built up with investors. All of the cash from the new offering is earmarked for new M&A, it says. The company has made a handful of acquisitions since its last tap, and shares are up more than 200% in the last 12 months.