Brazilian Travel Co Plans IPO

Brazilian travel operator Brasil Travel Turismo e Participacoes has filed with local regulators to carry out an IPO. Brasil Travel is a holdco for 35 companies involved in businesses such as travel agencies, foreign exchange, travel insurance, and tour operations. The company is headed by Paulo Castello Branco, a former VP of Brazilian airline TAM, and chaired by co-founder and ex-BTG Pactual partner Pedro Guimaraes. It has not yet indicated the number of primary and secondary shares to be sold, but it is expected to target a size of about BRL500m ($275m). The secondary shares are to be sold by the founders’ vehicle, owned by Guimaraes, the Sette family and Jose Marcilio Nunes. Brasil Travel plans to use the primary proceeds to grow in Brazil and in other countries in LatAm, with about 85% of the funds to be spent on acquisitions. The issuer was formed in March and comprises companies spread throughout Brazil, which together posted BRL137m in Ebitda in 2010. Barclays, Credit Suisse and Flow Corretora are managing the sale. No Brazilian company has issued an IPO since July, and investors are skeptical that such deals can happen before April 2012. Market conditions still need to improve and a few large follow-ons should first test appetite early next year before any IPO issuance can take place, they say. Fellow tourism operator CVC is also among the many Brazilians preparing an IPO.