Mexican Dairy IPO Prices at Top

Grupo Lala has priced an IPO at the top of the range, according to people familiar with the transaction, a deal that should raise MXP14.04bn ($1.08bn) and was multiple times subscribed. The Mexican dairy and food products company priced Mexico’s biggest IPO of the year Tuesday night, despite following a 1.2% loss Tuesday in the Bolsa. The issuer is offering 444m primary shares at MXP27.50 each, meaning a MXP14.04bn deal if a 15% greenshoe is included. The price comes versus a MXP23.50-MXP27.50 range, and continues Mexico’s strong pace in ECM this year while offering investors a new angle to the Mexican consumer food products play. The deal was to result in a minimum 19% free float, with the controllers’ holding going from 69% to at most 56%. Lala is raising funds to repay bank debt and to fund its growth plans, which include investments in its existing capacities as well as possible acquisitions in Mexico, Central America and “new geographies.” JPMorgan was global coordinator, joined by Morgan Stanley and BBVA as bookrunners and Santander, Inbursa, Banorte-Ixe and Banamex as co-managers. The transaction is the second-largest IPO in LatAm this year after BB Seguridade, and the largest Mexican IPO since Macquarie’s Fibra last year. Today in the region’s ECM, Tupy is scheduled to hold a follow-on to raise more than $250m-equivalent, and Grupo Interacciones an IPO targeting $300m.