Cencosud Pays R$875m for Brazilian Supermarket Chain

Chile’s largest retail company Cencosud has agreed to acquire Brazilian supermarket chain Prezunic for R$875m ($494.4m), after days of rumors regarding the transaction. Considering working capital and debt adjustments of R$189m under the terms of the deal, the net payment for the company assets comes to R$685m, Cencosud said in a statement. Company officials declined to comment further on valuation details or which institutions advised on the transaction. Chile’s retail chain has made no secret of its expansion plans which have put pressure on its cash flows and increased its leverage versus its peers. Barclays Capital estimates, the company now has a debt-to-Ebitda ratio in the low 3x area. As a result of the latest transaction, Cencosud establishes a presence in Rio de Janeiro, where Prezunic is the third largest supermarket chain.