LatinFinance - January/February 2015 - 10

NEWS
M&A

At the end of 2014, deal flow trickled in, with domestic transactions
dominating. That rounded out a year of sharp contrasts between
activity in Brazil and the rest of the region. By Katie Llanos-Small

Local bias
Despite it being a poor year
for Brazilian M&A, new
transactions hit the market in
November and December. Of
those, Altice's agreement to
buy Oi's shares in PT Portugal
in December was the largest
announced transaction. Altice
is to pay €7.4 billion, with
adjustments for cash and
debt. The deal excludes PT
debt, its Africatel stake, and
bonds issued by Rio Forte
Investments.
Also in the telecoms sector,
American Tower do Brasil
agreed to buy 6,400 cell phone
towers from Tim Paricipações
for 3 billion reais ($1.2 billion)
in a sale and leaseback
arrangement.
In the education space,
Brazilian private education
provider Ser Educacional
agreed to buy the Sociedade
Paulista de Ensino e
Pesquisa, which owns
Guarulhos University, for 199
million reais. The acquisition
will "transform" it into a
national company, from
a regional one, the buyer
said. Kroton, meanwhile,
is in talks with a rival over a
new acquisition in the same
industry, chief executive
Rodrigo Galindo told
LatinFinance.
The company was in
the early stages of other
possible acquisitions, he said.
"Acquisitions are still a growth
driver for the company," said
Galindo. "It's a fragmented
market."

Brazilian lender Banco
Daycoval said it would
buy its competitor Banco
Commercial Investment
Trust do Brasil, known
as Banco CIT Brasil. The
purchase price for the
information technologyfocused lender, which has 687
million reais in assets, was not
disclosed.
Protein producer JBS,
meanwhile, agreed to buy
Grupo Primo, a processed
meats company that operates
in Australia and New Zealand,
for 1.45 billion Australian
dollars ($1.25 billion).
JBS forecasts 30 million
Australian dollars in synergies
over the 12 months to June, a
figure that would suggest an
enterprise value of eight times
Ebitda.
The news came the day
after JBS said it would buy
Brazilian poultry operator Big
Frango Group for 430 million
reais. The acquisition, through
JBS Foods, strengthens that
subsidiary's reach in the
Brazilian consumer poultry
market, JBS said.
Despite this activity,
Brazil-targeted M&A volume
made up the smallest portion
of overall LatAm activity
since 2007, according to
preliminary statistics for the
year from Dealogic. Some
$53.9 billion of Brazil-targeted
deals went through in 2014,
down 23% year on year, and
accounting for just 46% of
regional business.

10 L ATINFINA NCE.COM - January/February 2015

M&A rank by volume, full year 2014
Credit Suisse tries to topple Goldman
Rank

Advisor

Value $m

1
2
3
4
5
6
7
8
9
10

Goldman Sachs
Credit Suisse
JPMorgan
Morgan Stanley
BofA Merrill Lynch
BTG Pactual
Itaú BBA
Citi
Deutsche Bank
Rothschild

41,423
41,113
36,563
31,551
30,849
29,224
29,119
27,348
27,225
24,443

23
31
16
21
22
43
72
15
13
19

157,706

Total

# Deals

1,579

Source: Dealogic

Regional bounce

The slump in Brazilian activity
came amid a sharp uptick
elsewhere. Chile and Perutargeted deals clocked in at
record volumes for the year, at
$21.1 billion and $10.4 billion
each, according to Dealogic.
In the last months of the year,
Colombian Grupo Nutresa
agreed to buy the country's
largest restaurant company,
Grupo El Corral. The 830
billion peso ($361 million) price
tag equates to an enterprise
value of around 11 times
expected 2014 Ebitda.
And in a sign of the growing
strength of Peruvian companies,
local conglomerate Grupo
Gloria more than doubled

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its stake in Bolivian cement
maker Sociedad Boliviana de
Cemento, or Soboce, for $300
million. It now owns nearly all
of the company.
Meanwhile, activity in
Mexico came to $22.2 billion
in 2014, according to Dealogic.
There, AT&T agreed to pay
$2.5 billion for the wireless
assets of Mexican telecom
firm Iusacell from Grupo
Salinas in November. The US
company hopes to create a
cross-border mobile service.
The deal follows reforms to
the industry in Mexico, and
AT&T's divestment of a stake
in América Móvil in favor of a
greater LatAm reach through
DirecTV. LF

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LatinFinance - January/February 2015

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