Kirin Pays Top Dollar for Rest of Schincariol

Japanese beer company Kirin struck a $1.35bn deal with minority shareholders of Brazilian brewer Schincariol, to acquire the 49.54% stake in the company that it didn’t already own. The deal comes just three months after Kirin agreed to pay $2.52bn for 50.45% of Schincariol, a transaction that, at the time, represented an enterprise value (EV) to Ebitda of 15.7x, significantly higher than the price paid in previous brewer company acquisitions. With the latest stake purchase, analysts estimate the final full acquisition figure for Schincariol at anywhere between 13 and 15x EV/Ebitda, higher than the prices paid for Heineken’s purchase of FEMSA Cerveza, estimated at 11x. “During the last 5 to 10 years in this business, the range has been 10 to 15x,” said Lauren Torres, a consumer products analyst at HSBC. Although the Brazilian market has seen a slowdown in consumption of late, Torres points out that with the growth these companies have seen in recent years, companies like Kirin feel that Brazil is definitely a place to do business. Kirin’s acquisition of Schincariol was not easy. Its initial stake purchase in August sparked the ire of minority holders which took their grievances to court seeking to block the sale. A court finally lifted the injunction and allowed the deal to proceed in mid-October. Schincariol’s majority owners originally hired BTG Pactual and Mattos Filho as advisors, while minority holders at one point worked with Teixeira Martins & Advogados. Kirin hired Citi, TozziniFreire Advogados and the Tokyo-Marunouchi Law Offices.