TTR DealMaker Q&A with PPU Peru Partner Rafael Boisset

Rafael Boisset, Partner in Philippi Prietocarrizosa Ferrero DU & Uría Perú, is an expert in corporate matters as well as mergers and acquisitions of private and listed companies in various industries of economy, representing both sellers and buyers. He has advised significant clients by his active participation in the strategic planning of acquisitions and corporate restructuring, project finance, and banking and corporate financing through capital markets. He has experience representing investment banks as well as companies that raise funds from international capital markets.

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TTR – Firstly, Mr. Boisset, we would like you to share your opinion on the progress of the Peruvian market in 2019. 

R. B. – Both the number and value of deals reported proved to be a quiet active year in terms of M&A transactions, which turns to be interesting considering the slowdown of the Peruvian economy and the political crisis we faced during the year and particularly in the last quarter. Once again the energy sector has been the most relevant in terms of size and complexity but we also saw relevant deals in the manufacturing industry, such as the Intradevco Industrial sell to Alicorp.

TTR – As an advisor in M&A deals, what could you tell us about the investors that show interest in Peru-based companies? What are the main attractions of those companies? 

R. B. – I would say macroeconomic stability, low inflation, stable exchange rates, independency of the Central Bank, simplicity of its tax regime, and a deep potential growth of the middle class, which is an opportunity in several industries.

Despite the slowdown of the economy, Peru has proved to be a country, in which its macroeconomic fundamentals showed to be isolated from the political instability 

TTR – In 2019, there was an interesting increase in agribusiness deals in the country. What can you tell us about that upsurge? 

R. B. – Unlike other countries in the region, Peru’s large coast has some strategic keys for the agribusiness, such as predictable weather, access to ports for exportation, water supply and reasonable land prices and workforce costs. We have seen a consolidation of land and production of local investors in the last 10 to 15 years, that are now being acquired by bigger players that need such scale to invest. 

TTR – What other sectors could potentially have a noteworthy increase in their activity in the mid-term? Why? 

R. B. – It will of course depend on how the economy will move in the mid-term, but we expect that sectors related to the increase of the middle class be more active, such as education, retail, healthcare, and real estate. 

Two other sectors that may be relevant are mining and infrastructure. In mining, the slowdown of commodity prices creates the need for some companies to divest and the opportunity to others to invest. In infrastructure, we expect the criminal trials to end in the midterm allowing new investors to acquire assets that the current conditions do not offer the transparency and security that are needed. 

TTR – Lastly, what is your forecast for the next year?

R. B. – We believe it will be a very active year, probably even more active than 2019. Key sectors will be education, healthcare and manufacturing.