Evercore to buy G5 stake to tap Brazil M&A boom
Tue Sep 14, 2010 10:26am EDT
* Evercore seeks Brazil expansion with G5 stake purchase
* Brazil M&A activity more than doubled to $86.2 bln
* Takeovers in Brazil seen reaching all-time high in 2010
SAO PAULO, Sept 14 (Reuters) - Boutique investment adviser Evercore Partners (EVR.N) said on Tuesday that it would buy a 50 percent stake in Brazil's G5 Advisors, looking to benefit from a surge in investment banking activity in Latin America's largest economy.
Evercore said in a statement that it would pay $20 million in cash and securities for a 50 percent stake in G5, founded by former Goldman Sachs (GS.N) Latin America head Corrado Varoli and partners. The New York-based company has an option to buy the remaining stake in 2014.
Brazilian mergers and acquisitions are expected to reach an all-time high this year as U.S. and Asian companies snap up local companies to benefit from red-hot growth in the country. Brazilian companies have also gone on an acquisition spree abroad, underscoring the nation's growing power in the corporate world.
"As we look ahead, we believe that the number of cross-border merger transactions will increase, and that Brazil and Latin America will be an increasingly important part of this trend," Evercore Chief Executive Ralph Schlosstein said.
Brazil was home to four of the 10 largest takeovers in the so-called BRIC region, which also includes Russia, India and China, in the first half of 2010, and volumes are seen picking up in the second half, according to the Brazilian Association of Financial and Capital Markets Firms, or Anbima.
Announced M&A volumes in Brazil more than doubled to $86.2 billion in 2010 through mid-September from $37.9 billion over the same period in 2009, according to Thomson Reuters data, and large deals in July and August point to brisk activity in the coming months.
Some of those transactions include Telefonica's (TEF.MC) $5.8 billion bid for a controlling stake in mobile phone company Vivo (VIVO4.SA)(VIV.N), Portugal Telecom's (PTC.LS) purchase of a stake in Oi (TNLP4.SA) for an estimated $4.7 billion, and the merger between Brazilian airline TAM (TAMM4.SA) and Chile's LAN LAN.SN, valued at $2.7 billion. (Reporting by Elzio Barreto; Editing by Lisa Von Ahn)
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