Advent-TCP Valuation Seen Fair

Advent International has acquired a 50% stake in Terminal de Conteineres de Paranagua (TCP) for around $500m, according to a Brazil-based source familiar with the situation. Analysts say the deal, which implies a valuation of around $1bn for the debt free target, suggests a multiple of around BRL2,400 per 20-foot equivalent unit (TEU). This is in line with TCP’s closest publicly traded comparable, Santos Brasil, which trades at around BRL2,300/TEU, analysts say. The privately held company reported revenue of BRL288m and net income of BRL116m for 2009. Advent trumped competing bids from Santos and Brookfield Asset Management. The acquisition will be funded from the private equity firm’s Lapef IV and Lapef V funds. Advent closed on the $1.65bn Lapef V fund in March of last year after receiving $2.65bn in demand from 51 investors, the largest fund raising on record for the region. Advent raised the $1.3bn Lapef IV fund in 2007. The deal announcement comes after a year-long auction run by Santander. Bradesco advised Advent. Brazilian press report that the acquisition price for the port operator would consist of a $418m initial payment with an additional $80m to be paid out over 2 years. A person close to the transaction says that this breakdown is inaccurate, although a portion of the purchase price would be paid at a later date and is contingent on performance benchmarks.