Mergers & Acquisitions in Brazil June 2013

Transcription

1 Mergers & Acquisitions in Brazil

2 H saw 397 announced transactions which was in line with H volumes Average of 296 transactions announced in H1. Average of 389 transactions announced in H1. Average of 176 transactions announced in H Jan-Dec Jan-Dez June Junho 397 transactions were announced in H Despite the slight drop of 1.5% compared to H (when 403 transactions were announced), 2013 volumes were in line with transaction volumes in previous years. Prospects for H are more cautious due to the combination of external factors and the socioeconomic Brazilian political environment. We see more opportunistic transactions for companies and investors who can capitalize on this moment of uncertainty to strengthen and consolidate their positions. 2

3 Transactions Transactions by quarter The H volumes trended as follows: st quarter 2nd quarter Jan Feb Mar Apr May Jun Comparing to H rd quarter Jan Feb Mar Apr May Jun th quarter The tables above illustrates that monthly transaction volumes are more or less in line with the comparable 2012 period. December 2010: 95 transactions May 2012: 88 transactions April 2013: 74 transactions Number of transactions February 2009: 27 transactions 3

4 65.2% of Brazilian M&A market is concentrated in the Southest North 2 % Northest 5.5 % Concentrated mainly in the southeastern region, domestic transactions totaled 352 announced deals. São Paulo leads as the hub for investments with a 48.6% market share, totaling 193 transactions in H1. Highlights include a 3 percentage point increase in the South, and a 12.5% increase in transactions involving foreign investors, rising from 40 deals in 2012 to 45 in Middle West 2.8 % H transactions South 13.1 % SP 48.6% RJ 10.1% MG 6% ES 0.5% Southest South Northest Middle-West North Foreign Note: * Does not include agreements, joint ventures and transactions between multinationals. Souces: PwC and Ministério da Fazenda. 4

5 Foreign investment weakens as domestic investors lead with a 58% market share Deals involving foreign investors suffered a fall of two percentage points compared to H1 2012, from 44% to 42% of all equity acquired in the M&A market. Domestic investor involvement was highlighted by growth of 4.6%, which rose from 194 transactions in 2012 to 203 transactions in Investment Origin Number of deals announced ( )* % 58% Domestic Nacionais Foreign Estrangeiros Nacionais Domestic Foreign Estrangeiros * Does not include Joint-Ventures and Mergers. 5

6 Majority interest purchases (acquisitions) continue to prove as the most popular deal structure; H saw 209 transactions and 48.6% of Brazilian M&A market 3% 5% 9% 1% Transactions category Controlling stake acquisitions Minority stake acquisitions Joint ventures 49% Mergers Minority stake acquisitions are the second most popular form of deal structure with 141 deals and 32.8% of the market. These structures were followed in popularity by joint ventures and mergers, which were involved in 21 (9.3%) and 14 (4.7%) transactions, respectively. Finally, H saw 10 asset deals (3.5%) and only two spinoffs (1.2%). 33% Asset Deals 250 Spin-offs 200 Controlling stake acquisitions Minority stake acquisitions Joint ventures Mergers Asset Deals Controlling Minority stake stake acquisitions acquisitions Joint ventures Mergers Transactions category Asset Deals Spin-offs Spin-offs 6

7 Through H1, IT leads the market with 56 announced deals Transactions by sector- H In line with the general trend observed over the past five years, the IT segment continues to draw the largest demand for investment in Brazil. With 56 transactions in the H1, leading to 14% of the Brazilian M&A market. 30% 14% 12% Private services sectors (segments such as consulting, management / participation, marketing / advertising, legal / brokerage), was the second most popular sector for investment with a total of 47 transactions. The retail market came in third with a total of 40 transactions in H1. 4% 4% IT 6% 6% 7% 10% 7% Private Services Smaller sectors such as education, logistics and health services totaled 119 deals and account for 30% of Brazilian M&A market. IT Top 5 sectors H1 ( ) Retail Mining Food Public Services Private services Banks (Petro) Chemicals Contruction Others Rentail Foods Mining

8 Private Equity Participating in 201 announced deals in H1 2013, private equity funds continue to be a dominant force in the Brazilian M&A market. Private equity investors were present in 50.1% of the 397 transactions in the period, an increase of 13.6% over H (with participation in 177 transactions). Domestic investment funds represent 120 of the total deals involving private equity (60% in 2013). Private Equity funds participation in H1 ( ) january february march april may june Nota: Transações divulgadas na imprensa. Não inclui acordos. 8

9 Private Equity Some transactions involving private equity funds in second quarter of 2013 included: April Otto Capital, Monashees Capital Ventures and Kaszek acquired a stake in GetNinjas for $ 6 million; Triunfo Participações e Investimentos raised R$330 million in new capital and announced the entry of BNDESPar; Guepardo increased its stake in Magnesita Refratários to 5.03%; Kinea Investmentos bought for U.S. $ 170 million 20% in Grupo ABC. May BNDESPar and FIP Multisetorial Plus Bradesco bought a stake in Brennad Cimentos for $ 210 million; Warburg Pincus and General Atlantic bought a 50% stake in a segment of Santander for EUR 2.05 billion; GP Investments bought a 26.7 % stake in Swiss APEN for $ 33 million; 500 Startups and Monashees Capital invested $2.1 million in RunRun.it. June Blackstone Group and Patria Investimentos bought 70% of Alphaville Urbanismo for $ 1.4 billion; Rocket Internet acquired a stake in startup EasyTaxi for $ 30 million; Gávea Investimentos bought 10.7% of Energisa SA; Petrobras and BTG Pactual formed a joint venture for oil and gas in Africa; 9

10 Glossary Definitions applied in this report categorizing a transaction Acquisitions are those transactions in which the buyer took control of the target company (i.e. more than 50% of the shares), took on additional shares, or any other transaction in which it is implied that control was transferred to the buyer. Minority are those in which the control of the company was not transferred among with the shares. These are transactions involving less then 50% of the target s share capital. Joint venture is a transaction where two or more partners start a new company together, separate from their existing, independent operations (N.B. not necessarily 50/50). It is different from a commercial agreement, where there a new entity is not incorporated. Merger is when two companies join their operations and start a third company (incorporating their existing activities and operations into the new entity). Asset deals are where a company absorbs the operations of another without acquiring the legal entity. Spin off is a type of transaction where a business is divided from the company it belongs to, into a new legal entity. It happens when companies want to split their business group into independent businesses. 10

11 Contacts Alexandre Pierantoni Leonardo Dell Oso Rogério Gollo PricewaterhouseCoopers. All rights reserved. PwC" refers to the network of member firms of PricewaterhouseCoopers International Limited, each constituting a separate and independent legal entity.