Latin America and the Caribbean M&A report Q

Transcription

1 Latin America and the Caribbean M&A report Q

2 Latin America Overview 3 Number of Deals 4 Number of Deals vs EBITDA Multiple 5 Deals by Sector 6 Deals by Country 8 Top 2 M&A Deals 9 Top 3 IPOs 11 LeagueBoard 12 DealMonitor 14 Key countries Brazil 15 Mexico 17 Argentina 19 Colombia 21 Chile 23 Notes & Disclaimer

3 M&A volume, value increases y/y in first three months of 214 In Q1 214, the volume of M&A activity in Latin America and the Caribbean was up by 12% y/y, while the total value of negotiated deals rose by 22% to USD 22.9bn. Brazil was the hottest market, accounting for more than 5% of the total number of deals and of their total value. The median EV/EBITDA multiple recovered y/y to 1.8x. The Services and Manufacturing sectors were the busiest in terms of number of deals. The largest transactions were registered in Transportation & Warehousing and Finance & Insurance. BTG Pactual and Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga topped our LeagueBoard by deal value for financial and legal advisors, respectively.

4 First quarter sees 12% increase in deal volume M&A activity in Latin America and the Caribbean 45 9 reached 329 deals in Q1 214, a 12% increase y/y Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Number of deals (left hand scale) Total value of deals ($bn, right hand scale) Deal volume surged in the five major markets, led by Colombia (71%) and Argentina (5%). Total transaction value was also up by 22%, mostly due to several large deals in Brazil. The largest deal was the all-stock reverse takeover between Brazilian railroad operator America Latina Logistica (ALL) and local logistics company Rumo. The transaction was estimated at around USD 3.bn. The largest IPO was of Bermuda-registered oil & gas company GeoPark for USD 1mn.

5 The median multiple recovers y/y x 12.5x 12.x 11.5x 11.x 1.5x 1.x The median EV/EBITDA multiple has increased y/y to 1.8x, in line with the increased deal activity. The valuation is a bit higher than the one from the same period of last year but has moved at a slower pace when compared to the increase in deals. 9.5x 9.x Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q x Number of deals EV/EBITDA

6 Latin America & the Caribbean Q1 214 Number of Deals Value of Deals Other 89 Finance & Insurance 3 Transportation & Warehousing 23.5% Utilities 1.2% Wholesale & Retail Trade 5.7% Wholesale & Retail Trade 36 Manufacturing 51 Services 13.4% Other 13.4% Services 59 Mining (incl. oil & gas) 28 Media & Entertainment 36 Mining (incl. oil & gas) 1.% Manufacturing 7.9% Finance & Insurance 16.%

7 Latin America & the Caribbean Q1 214 Number of Deals Other Wholesale & Retail Trade Utilities Transportation & Warehousing Telecom & IT Services Mining (incl. oil & gas) Media & Entertainment Manufacturing Q1 214 Q1 213 With 21 deals, Transportation & Warehousing registered more than a double y/y growth in deal volume. The most active sectors Manufacturing and Services also saw 5% and 28% jumps in activity, respectively. Food & Beverages Finance & Insurance Food & Beverages took the most significant hit during the first quarter of 214, as compared to the same period of last year.

8 Q1 214 deal activity surges across most countries in the region Country/Region Q1 213 Q1 214 % change Argentina % Bolivia % Brazil % Chile % Colombia % Ecuador % Brazil and Mexico, the two largest markets in South America, saw increases in deal activity of 11% and 28%, respectively. The only country to experience a decline in activity y/y was Uruguay, where deal count fell from 1 to 8 deals. Mexico % Paraguay % Peru % Uruguay % Venezuela % Central America & the Caribbean %

9 The largest deal in Q1 214 was the reverse takeover between Brazilian logistics companies ALL and Rumo 1. Target Company ALL - America Latina Logistica SA Country of Target Brazil 2. CorpBanca SA Chile Industry Deal Type Buyer Transportation & Warehousing Finance & Insurance properties in Brazil Brazil Services Block BC-1 in Campos Basin Grupo Notre Dame Intermedica Argentinean operations of Apache Corp Brazil Brazil Argentina 7. Grupo Fermaca SA de CV Mexico Empresa Electrica Guacolda SA Siderurgica del Orinoco CA (Sidor) Chile Venezuela 1. BRF SA Brazil Mining (incl. oil & gas) Finance & Insurance Mining (incl. oil & gas) Transportation & Warehousing Utilities Manufacturing Food & Beverages Country of Buyer Deal Value (USD mn) Rumo Logistica Operadora 2,973.1 Brazil Multimodal SA purchase (33.6%) Itau Unibanco Holding SA Brazil 2,25. (DW estimate) 1,359.1 Global Logistic Properties Ltd Singapore 1,. Qatar Petroleum Co Qatar purchase (23%) Bain Capital LLC United States (Market estimate) 8. YPF SA Argentina Partners Group AG; 75. Switzerland (n.a. %) private investors 728. AES Gener SA Chile (5%) 668. Government of Venezuela Venezuela purchase (2%) (Market estimate) GIC Pvt Ltd Singapore purchase (3.8%) (DW estimate) The list does not include the alleged sale to Batista family of the equity interest held by Bertin family in Brazilian meat producer JBS SA, estimated to be worth some USD 2bn.

10 1 of the Top 2 deals involved target companies in Brazil 11. Target Company Transportadora de Gas del Peru SA (TgP); Compania Operadora de Gas del Amazonas SAC Country of Target Peru 12. B2W - Companhia Digital Brazil 13. Transportadora de Gas del Peru SA (TgP) Peru Industry Deal Type Buyer Transportation & Warehousing Wholesale & Retail Trade Transportation & Warehousing 14. VTR GlobalCom SA Chile Telecom & IT 15. Santo Antonio Energia SA Brazil Utilities 16. Convenience store business Extra of Grupo Modelo Mexico Wholesale & Retail Trade 17. Dobreve Energia SA Brazil Utilities 18. GasAtacama SA Chile Utilities 19. Sonae Sierra Brasil SA Brazil Services 2. JK Iguatemi shopping centre Brazil Services purchase (n.a. %) purchase (18.9%) purchase (22.4%) purchase (2%) purchase (1.3%) (5%) purchase (33.3%) (5%) Canada Pension Plan Investment Board (CPPIB) Tiger Global Management LLC Enagas SA Liberty Global Plc Banco Modal SA Operadora Circulo CCK SA de CV (Circulo K) CPFL Energias Renovaveis SA Empresa Nacional de Electricidad SA (Endesa Chile) Country of Buyer Canada United States Spain United Kingdom Brazil Mexico Brazil Chile Alexander Otto - private investor Germany Iguatemi Empresa de Shopping Centers SA ; TIAA-CREF Brazil; United States Deal Value (USD mn) (Market estimate) (DW estimate)

11 The largest IPO during the first three months of 214 was of Bermudaregistered, Latin America-focused oil & gas company GeoPark Target Company Country of Target Industry Stake 1. GeoPark Ltd Bermuda, Argentina Mining (incl. oil & gas) 23.5% Deal Value (USD mn) Petrolera Pampa SA Argentina Mining (incl. oil & gas) 5.% Margaritaville (Turks) Ltd Turks and Caicos Islands Services 31.3% 2.1

12 Latin America & the Caribbean Q1 214 Financial Advisors: Value Financial Advisors: Volume * Company Deal Value (USD mn) Number of Deals 1. BTG Pactual 6, Goldman Sachs 4, Bank of America Merrill Lynch 4, Banco Itau BBA 3, N M Rothschild & Sons Ltd 3, RBC Capital Markets 3, = Brasil Plural Banco Multiplo 2, = Estater Gestao e Financas 2, Credit Suisse 2, Citigroup 2, Nomura 1, Company Number of Deals Deal Value (USD mn) 1. BTG Pactual 11 6, Banco Itau BBA 7 3, Goldman Sachs 5 4, Lazard Ltd 4 1, = N M Rothschild & Sons Ltd 3 3, = Credit Suisse 3 2,71.8 5= Citigroup 3 2,86.3 5= Morgan Stanley 3 1, = Bank of America Merrill Lynch 2 4,5. 6= RBC Capital Markets 2 3,455. 6= Nomura 2 1,855.2 * Includes only advisors with total deal value of USD 1,mn and above.

13 Latin America & the Caribbean Q1 214 (cont d) Legal Advisors: Value Legal Advisors: Volume * 1. Company Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Deal Value (USD mn) Number of Deals 6, Claro & Cía 4, Souza, Cescon, Barrieu & Flesch Advogados 3, Barbosa, Müssnich & Aragão 3, Vieira, Rezende, Barbosa e Guerreiro Advogados Simpson Thacher & Bartlett LLP 2, , Demarest Advogados 2, Pinheiro Neto Advogados 2, Brigard & Urrutia Abogados 2, Posse, Herrera & Ruiz Abogados 2, Company Number of Deals Deal Value (USD mn) 1. Pinheiro Neto Advogados 17 2, Stocche Forbes Padis Filizzola Clapis Advogados Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Machado, Meyer, Sendacz e Opice Advogados , TozziniFreire Advogados = Barbosa, Müssnich & Aragão 6 3,899. 6= Demarest Advogados 6 2, = Veirano Advogados = Simpson Thacher & Bartlett LLP 4 2, = Jones Day = White & Case LLP * Includes only advisors with four deals and above.

14 Number of new deal intentions in Latin America & the Caribbean 75 The number of buy side intentions has been declining for four quarters in a row, reaching only intentions in Q Compared to the same quarter of last year, the number slumped dramatically by 65% Buy side refers to companies looking to acquire other companies or assets. Sell side refers to 25 2 companies searching for potential investors. The number of new deal intentions includes official statements by companies, market rumors Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Buy side Sell side as well as exclusive information collected by our analysts and journalists.

15 Q1 214 sees increases in both deal volume, value In Q1 214, M&A activity in Brazil rose by 11% to 167 deals Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Number of deals (left hand scale) Total value of deals ($bn, right hand scale) The total value of negotiated deals jumped almost twofold to USD 12.1bn. The Services and Manufacturing sectors were the most active, with 31 and 29 registered deals, respectively. The largest deal was the all-stock reverse takeover between Brazilian railroad operator America Latina Logistica (ALL) and local logistics company Rumo.

16 Top 1 Deals Q1 214 Target Company Industry Deal Type Buyer 1. ALL - America Latina Logistica SA Transportation & Warehousing Rumo Logistica Operadora Multimodal SA Country of Buyer properties in Brazil Services Global Logistic Properties Ltd Singapore 3. Block BC-1 in Campos Basin 4. Grupo Notre Dame Intermedica 5. BRF SA 6. B2W - Companhia Digital Mining (incl. oil & gas) Finance & Insurance Food & Beverages Wholesale & Retail Trade 7. Santo Antonio Energia SA Utilities 8. Dobreve Energia SA Utilities 9. Sonae Sierra Brasil SA Services 1. JK Iguatemi shopping centre Services purchase (23%) Qatar Petroleum Co Brazil Qatar Bain Capital LLC United States purchase (3.8%) purchase (18.9%) purchase (1.3%) purchase (33.3%) (5%) GIC Pvt Ltd Tiger Global Management LLC Banco Modal SA CPFL Energias Renovaveis SA Alexander Otto - private investor Iguatemi Empresa de Shopping Centers SA ; TIAA-CREF Singapore United States Brazil Brazil Germany Brazil; United States Deal Value (USD mn) 2, , , (Market estimate) (DW estimate) (DW estimate) The list does not include the alleged sale to Batista family of the equity interest held by Bertin family in Brazilian meat producer JBS SA, estimated to be worth some USD 2bn.

17 Value of negotiated deals drops three times in Q During the first three months, M&A in Mexico saw a 28% increase in deal flow but the total transaction value slumped to USD 1.6bn The most active sector was Services, followed by Manufacturing and Wholesale & Retail 8. Trade The largest deal was the purchase of an undisclosed majority stake in local gas Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 infrastructure company Grupo Fermaca by a Swiss private equity fund for USD 75mn. Number of deals (left hand scale) Total value of deals ($bn, right hand scale)

18 Top 1 Deals Q1 214 Target Company Industry Deal Type Buyer 1. Grupo Fermaca SA de CV Convenience store business Extra of Grupo Modelo Sonora federal penitentiary concession; Jalisco federal penitentiary concession Impulsora del Deportivo Necaxa SA de CV (Club Necaxa) Credito Real SAB de CV SOFOM ENR Grupo Comercial e Industrial Marzam SA de CV (Grupo Marzam) Compania de Energia Mexicana SA de CV (CEM) Fiesta Americana Aguascalientes hotel Hotel Aloft Guadalajara Las Amaricas Fiesta Inn Xalapa hotel; One Xalapa hotel Transportation & Warehousing Wholesale & Retail Trade Services Media & Entertainment Finance & Insurance Wholesale & Retail Trade Utilities Services Services Services * Through the deal, the buyer will increase its stake in CEM to over 51%. (n.a. %) (7%) purchase (9.7%) (5%) (29.7%) * Partners Group AG; private investors Operadora Circulo CCK SA de CV (Circulo K) Hunt Companies Inc Ernesto Tinajero - private investor; Guillermo Cantu - private investor Private Investors Genomma Lab Internacional SAB de CV Compania Minera Autlan SAB de CV FibraHotel Fibra Inn FibraHotel Country of Buyer Switzerland Mexico United States Mexico Mexico Mexico Mexico Mexico Mexico Deal Value (USD mn) (Market estimate) (Market estimate) 58.2 (DW estimate)

19 Deal volume, value surges in first three months With 33 deals, Argentina registered a 5% increase in deal activity y/y. The total value of negotiated transactions also rose dramatically y/y to USD 1.1bn, a record high for the period in the past 3 years. Mining (incl. oil & gas) was the most active sector and also saw the most expensive deals overall Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Number of deals (left hand scale) Total value of deals ($bn, right hand scale) The largest deal was the acquisition by Argentinean oil & gas company YPF of the local operations of U.S. peer Apache Corp for USD 8mn.

20 Top 5 Deals Q Target Company Industry Deal Type Buyer Country of Buyer Argentinean operations of Apache Corp Three concessions and five JV contracts of YPF 3. Puesto Hernandez oil concession Mining (incl. oil & gas) Mining (incl. oil & gas) Mining (incl. oil & gas) 4. Laboratorios Biagro SA Manufacturing 5. Trilenium SA Media & Entertainment purchase (38.5%) (5%) YPF SA Pluspetrol SA YPF SA Bayer AG Cristobal Lopez private investor Argentina Argentina Argentina United States Argentina Deal Value (USD mn) (Market estimate) 15.8

21 Q1 M&A activity in Colombia rebounds to previous levels 45 6 After a slump in the first quarter of last year, Colombian deal flow bounced back to 36 deals in Q1 214, a 64% increase y/y In the first three months, the total value of negotiated deals also doubled y/y to USD.6bn. Mining (incl. oil & gas) was the most active 15 2 sector in terms of both deal count and total value..3.6 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Number of deals (left hand scale) Total value of deals ($bn, right hand scale) The largest deal was the sale of the Colombian coal assets of CCX to Turkish holding company Yildirim for USD 125mn.

22 Top 1 Deals Q1 214 Target Company Industry Deal Type Buyer Country of Buyer 1. CCX Colombia SA Mining (incl. oil & gas) 2..CO Internet SAS Telecom & IT food & beverages stores of Wholesale & Comercializadora Giraldo Gomez y Cia SA Retail Trade Industria Colombiana de Lacteos Ltda; 4. Conservas California SA; Food & Pasterizadora Santandereana De Leches SA; Beverages Erwis Asociados Ltda; Enfriadora Vallenata Ltda 5. Compania de Desarrollo Aeropuerto Eldorado SA (Codad) Construction 6. Tintas SA; Sinclair SA Manufacturing 7= Wacolda SA Corredores de Seguros; Finance & Proseguros Corredores de Seguros SA Insurance 7= COR 4 oil block; Mining COR 12 oil block (incl. oil & gas) 8. Skynet de Colombia SA ESP Telecom & IT 9. Tinigua oil block 1. Bolivar oil block Mining (incl. oil & gas) Mining (incl. oil & gas) (5%) (n.a. %) (8%) (75%) (5%) (5%) Yildirim Holding AS Neustar Inc Almacenes Exito SA Gloria SA Ashmore Group Plc DIC Corp Hyperion Insurance Group Ltd Canacol Energy Ltd Empresa de Telecomunicaciones de Bogota SA (ETB) Pacific Rubiales Energy Corp Everest Hill Energy Group Ltd Turkey United States Colombia Peru United Kingdom Japan United Kingdom Canada Colombia Canada United States Deal Value (USD mn) (Market estimate) (Market estimate)

23 Deal volume remains flat y/y With 3 registered deals, M&A activity in Chile remained flat y/y in Q The total value of negotiated transactions, Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Number of deals (left hand scale) Total value of deals ($bn, right hand scale) however, surged more than three times to USD 4bn due to a couple of very large deals. Utilities was the most active sector and also registered the most expensive deals on average. The largest deal was the purchase of 33.6% in local bank CorpBanka by Brazil s Itau Unibanco. The all-equity transaction was estimated by DealWatch at USD 2.2bn.

24 Top 1 Deals Q1 214 Target Company Industry Deal Type Buyer Country of Buyer 1. CorpBanca SA Finance & Insurance 2. Empresa Electrica Guacolda SA Utilities 3. VTR GlobalCom SA Telecom & IT 4. GasAtacama SA Utilities 5. Undisclosed forestry company Power transmission line Maitencillo-Cardones Agricola El Monte SA; Agricola y Ganadera Chillan Viejo SA Prefabricados Andinos SA (Preansa) Agriculture, Forestry, Fishing and Hunting Utilities Food & Beverages Manufacturing 9. Chile Botanics SA Manufacturing 1. Coasin Instalaciones Ltda Telecom & IT purchase (33.6%) (5%) purchase (2%) (5%) (8%) (51%) (51%) Itau Unibanco Holding SA AES Gener SA Liberty Global Plc Empresa Nacional de Electricidad SA (Endesa Chile) Hancock Natural Resource Group Inc Transelec SA MaxAgro SA Union Andina de Cementos SAA Naturex SA Grana y Montero SAA Brazil Chile United Kingdom Chile United States Chile Chile Peru France Peru Deal Value (USD mn) 2,25. (DW estimate)

25 This document covers the transactions recorded in the EMIS Professional M&A database that are fitting the following criteria: Geography: We have listed transactions with target companies located in the following countries: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela and Central America & the Caribbean Deal Status: Announced or Closed Market: only M&A transaction are included; IPO deals are listed separately Excluded Deal Types: Restructurings within one holding (no change in ownership), joint ventures, IPOs, SPOs, buy-backs of shares and debt-to-equity swaps Deal Size: USD 1 million and above. In cases where not clearly indicated, it is assumed that the reported deal value does not include debt. Announcement Date: 1 January March 214 If the deal value is not reported or estimated, it is considered to be zero in calculations. Top deals are selected by announced or estimated deal values. For deals that involve targets operating in more than one country, the deal value is broken down and allocated across all countries involved. The allocation is done based on each country s contributions to the overall revenues of the target company. The resulting allocated value is included in the volume of deals and the sector breakdowns for each profiled country and for Latin America. The list of top deals for each country includes only deals where the target s operations are restricted to the respective country. The list of top deals for Latin America may include deals where the target operates in multiple countries in the region. LeagueBoard data is based on DealWatch intelligence and information provided by advisors. In the LeagueBoard we have taken into consideration the deals subject to the criteria described above, however geography was extended for deals with either a buyer, seller or a target located in Latin America. Data collection was closed on 4 April 214. Contacts: Web: [email protected] Disclaimer: The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional Investor PLC take no responsibility for decisions made on the basis of these opinions. Any redistribution of this information is strictly prohibited. Copyright 214 EMIS, all rights reserved. A Euromoney Institutional Investor company.