Voto Cimentos Aims IPO

Votorantim Cimentos has launched its IPO, targeting BRL8.0bn ($3.8bn), with pricing likely the week of June 17, according to people familiar with the plan. Investor meetings are set to begin in Brazil next week, followed by international visits. The cement business of Brazil’s Votorantim conglomerate is planning to sell 286m primary units and 114m secondary units at BRL16.00-BRL19.00 each, according to a prospectus, indicating a BRL8.05bn sale at the midpoint if a 15% all-primary share greenshoe is included. A 20% hot issue of both primary and secondary shares is also available. The target amount suggested by the pricing guidelines is less than the $5.4bn the issuer had estimated in its initial filings. The deal includes a Brazilian tranche and a US ADS tranche expected to make up at least 10% of the sale. A unit represents one common share and two preferred shares. The secondary shares are to be sold by controller Votorantim Industrial. Votorantim Cimentos plans to use 45% of the primary proceeds for organic expansion and acquisitions, 40% for working capital and 15% for investments to improve existing operations. BTG Pactual, Credit Suisse, Itau, JPMorgan and Morgan Stanley are the global coordinators on the transaction, with Banco do Brasil, Banco Votorantim, Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and HSBC as bookrunners. The issuer has operations on five continents, including business in North Africa, India and China. In LatAm, it has stakes in operations in Argentina, Chile, Bolivia, Uruguay and Peru. It reported Ebitda of BRL3.07bn ($1.55bn) in 2012. The deal will offer another test of appetite for large Brazilian deals, following BB Seguridade’s BRL11.5bn IPO in April. In Colombia earlier this month, Cementos Argos priced a $900m-equivalent deal at the bottom of its range. Up next in the Brazilian pipeline is Iguatemi, scheduled to price a BRL480m follow-on Tuesday.