Abril Launches Educacao Spinoff

Private education company Abril Educacao has launched its IPO, targeting more than BRL500m ($319m) when it prices July 21. The Brazilian publisher and operator of schools plans to sell 18.6m units at BRL21.75-BRL26.75 each, indicating a BRL518m size at the BRL24.25 midpoint and including a 15% greenshoe. A 20% hot issue is also available. Both the greenshoe and the hot issue would consist of secondary units to be sold by members of the controlling Civita family and private equity funds managed by BR Investimentos and Banif. A unit consists of one ordinary share and two preferred shares. Abril Educacao, part of the media conglomerate Grupo Abril, plans to use 63% of the proceeds for acquisitions, 27% for paying off debt, and 10% for opening new schools and improving old ones. Abril says it would be the first listed education company in Brazil with a focus on basic and pre-college education. Listed education specialists Kroton, Anhanguera and Estacio have all tapped the equity markets recently to fuel rapid growth in one of the country’s hottest sectors, but they have more of a focus on the college and continuing education levels. Abril also specializes in book publishing, technical education, preparation for public sector exams, and plans to enter the fields of language education and distance learning. It booked Ebitda of BRL102.5m ($64.5m) in 2010, up from BRL85.8m ($54.0m) in 2009, according to its prospectus. Bradesco, Credit Suisse, Itau and JPMorgan are managing the transaction.