BTG Pactual Seals Celfin Acquisition

Brazilian investment bank BTG Pactual has finally closed its much anticipated purchase of Chile’s Celfin Capital in exchange for 2.42% of BTG equity and $245m in cash. The merger creates a firm with $69bn in assets under management and a $28bn wealth management business, the companies say. Currently Celfin has $4.5bn in its asset management division and $5bn in wealth management. As part of the deal’s financials, the parties value BTG Pactual’s total equity at roughly $5bn but they expect this to triple once the bank goes public, given that some of LatAm’s largest banks are trading at three times book value, say people close to deal. Under those assumptions, a 2.42% stake of $15bn in equity would be worth $363m. Officials at BTG Pactual could not comment further on the deal and officials at Celfin declined to offer more details, but said the parties did not retain any financial advisors for the transaction. Merger talks began last August, but details were closely held from public view. BTG is seeking to expand its footprint outside Brazil and Celfin has been seeking a way into the Brazilian market. BTG CEO Andre Esteves told LatinFinance in early 2011 that moves into Colombia, Chile and Argentina were natural next steps for the bank. BTG recently filed initial registration with the CVM, the first step towards an IPO. Founded in 1988, Celfin is owned by 6 partners, including Juan Andres Camus and Jorge Errazuriz.