Equity War Chest Fuels Anhanguera Buys

Following a string of acquisitions last month, Brazil’s Anhanguera Educacional Participacoes has the resources to continue its buying spree at a similar pace, a finance official says. The education company has used about 25% of the BRL734m ($465m) it raised in last year’s equity follow-on, as it plans to add 40 campuses through M&A by 2012. “This is a comfortable pace, and the funds we raised are more than enough,” Jose Augusto Teixeira, director of strategic planning and investor relations, tells LatinFinance. Buying smaller players before others do and establishing a foothold in new cities are part of the company’s strategy, he explains. Anhanguera in late May acquired the operator of Faculdade Metropolitana de Belo Horizonte and the Praetorium Institute for a combined BRL40m. The fragmented private education sector still has significant room for consolidation and scaling, and is also attracting interest from foreign players, analysts say. “There is a lot of interest from abroad and this will continue. However, it’s hard for a foreign player to emulate what we’ve done,” Teixeira says. He explains this would require buying a large platform. He notes that there is still space for Anhanguera and its large domestic competitors such as Estacio and Kroton to all grow at this pace in the medium term without causing a bidding war. Debt is not a major part of the company’s fundraising plans, he says, though a local BRL200m debenture due in 2012 may get a rollover.