Loading ...News - Carlyle Plans ‘Mid-$100 Million’ Deals in Brazil
Dec. 2 (Bloomberg) - Carlyle Group, the world’s second- largest private-equity firm, will soon announce two or three acquisitions in the “mid-$100 million” range in Brazil to take advantage of faster growth, said co-founder David Rubenstein.
The deals will be “very attractive,” Rubenstein told reporters in Sao Paulo, without giving details. He said it’s important for the group to invest in Latin America’s biggest economy because of its size and growth potential.
“You can’t be global not being in Brazil,” Rubenstein said. “Brazil has the world’s sixth-largest population, it’s the ninth-largest economy and will become the fifth largest.”
Private-equity companies such as Washington-based Carlyle are looking for new investments after the global recession triggered a two-year drought. Rubenstein said in October the best investment opportunities are in distressed assets, energy and health care. He said today bank lending has resumed since the financial crisis, which, triggered by record U.S. subprime mortgage defaults, effectively closed the buyout market.
“The deals are in the mid-$100-million range,” Rubenstein said. “We can’t have multi-billion-dollar deals in Brazil. Not for a while. Investors want to make higher returns on their money. If you do a $30 billion buyout and don’t make any return, it’s not better than making a $300 million deal.”
Initial Public Offerings
About 30 percent of initial public offerings in recent years involved companies with private-equity investments, Thomas Tosta de Sa of Brazil’s venture capital and private-equity organization said in an interview in July. About 450 companies in Brazil are private-equity backed, he said.
Companies such as Tivit Terceirizacao de Tecnologia e Servicos SA sold shares in initial public offerings this year after cancelling plans in 2008 amid the crisis. Banco Santander Brasil SA raised 12.3 billion reais ($7.15 billion) in a record IPO in October, topping the previous record by Cia Brasileira de Meios de Pagamento.
Brazil’s economy will expand 5 percent next year, according to the median estimate of about 100 economists in a Nov. 27 central bank survey. Gross domestic product is likely to grow 0.2 percent this year after banks resumed lending and government tax cuts spurred sales of vehicles and household appliances, according to the survey.
Source: Bloomberg.
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