LatinFinance - January/February 2015 - 59

16
14
12
10
8
6
4
2
May-14

Mar-14

Jan-14

Nov-13

Sept-13

Jul-13

May-13

Mar-13

Jan-13

0

Source: Kroton

From the change to the swap ratio in May
to the deal's conclusion in July, Anhanguera
and Kroton shares rose 29.2% and 19.4%,
respectively, according to Itaú BBA. In the
following months, Kroton's share price
continued to rise.
The scale achieved through merging
offers particular benefits to education
companies, says Galindo.
Bigger providers can implement

SYNDICATED LOAN

Sigma Alimentos $1bn term loan
A swiftly arranged and attractively priced deal helped
Sigma secure a majority stake in Spain's Campofrio, gaining a foothold in Europe
Sigma Alimentos launched a bid in
November 2013 to buy Campofrio, a
Spanish food maker that specializes in
meat products. Eight months later, the
Mexican food company owned a majority
of Campofrio, thanks in large part to swiftly
arranged acquisition funding on attractive
terms.
Japan's Mitsubishi UFJ Financial Group
(MUFG) was sole lead on the loan, a $1
billion senior unsecured five-year facility
that was closed in January and tied to a
leverage grid. The loan was priced at 125
basis points over Libor, with 14 banks
participating in the syndication.
Linklaters, Paul Hastings, Ritch Mueller,
and Shearman & Sterling provided legal
advice on the deal.

Getting the financing in place rapidly
was vital. Under Spanish law, a company
wishing to purchase another must have a
guarantee from its bank for the full amount
of the acquisition. MUFG provided that.
"When we were faced with the
complexity of the transaction [...] we talked
to a few of our banks, and the one that
was more flexible and eager to help us do
the deal was Bank of Tokyo-Mitsubishi,"
says Ramón Leal, chief financial officer of
Monterrey-based Grupo Alfa, which owns
Sigma Alimentos.
"That was something that caught
our attention, because it gave us time
to make the acquisition and fulfill other
requirements that the Spanish authorities
were presenting to us."

RAMÓN LEAL, GRUPO ALFA

"THEY CAME WITH US
ALL THE WAY. THEY
WERE VERY FLEXIBLE
AND VERY FAST TO
ACT. THAT WAS A KEY
ADVANTAGE"
Sigma partnered with China's WH Group
on the acquisition. By mid-November 2013,
Sigma had signed purchase agreements for
45% of Campofrío.
Leal says Sigma went with MUFG
because of the tenor, the price and the
speed. "They came with us all the way," he
says. "They were very flexible and very fast
to act. That was a key advantage."
Over the following five months Sigma
increased its stake to over 60% of the
Spanish firm through a tender offer.
Leal said he expects the merger to
reduce costs and create added value for
shareholders. "The acquisition gives Sigma
the opportunity to have a foot in Europe
at a moment in which Europe, in our view,
was touching bottom, and little by little it
has come back up in terms of economic
growth."
For 2015, Leal says Sigma plans to launch
an initial public offering and use the cash
to pay off debt and reduce leverage. In
November, Sigma was also planning to
issue a bond to refinance €500 million of
Camprofrio's debt that Sigma acquired. LF

NEATLY PACKAGED: A syndicated
loan financed Sigma Alimentos'
acquisition of Spain's Campofrío

©REUTERS

18

Nov-14

20

systems more easily for
experienced teachers
to monitor schools
within the network,
guaranteeing high
standards. They can also
negotiate better deals on
materials, particularly
technology. "With scale,
we can make more
investments in quality and
technology," he says.
In total, Kroton
foresees savings of an
equivalent of around $120
million from synergies
between the two
companies. The pair also
has "a geographic fit" - Anhanguera
was present in few cities where Kroton
already had operations - Galindo says.
This deal made further sense, as
Anhanguera's students scored less
well than those of Kroton in national
evaluations, so students could
benefit from integration with a betterperforming platform, Galindo says. "The
quality of the education provided will
increase with this merger," he says. LF
Sept-14

Kroton share price (BRL), 2013-2014

Jul-14

Strong performance

January/February 2015 - L ATINFINA NCE.COM 59
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