Appetite Grows for Chilean Food Assets

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LATIN AMERICA

TTR Deal Tracker is a monthly email update identifying M&A trends in Latin America and compiling YTD rankings of leading financial and legal advisors

BRAZIL: Telecom dealmaking gains ground

Dealmaking in Brazil’s telecom sector inched ahead in the first nine months of 2016, with a 46% increase in transaction volume compared to the same period last year, according to TTR data (www.TTRecord.com).
Inbound deals in the sector were sparse in both periods, with just two of 13 transactions led by international buyers in the first nine months of 2015, and one of 19 by the close of September this year.

CHILE: Appetite grows for food industry

Transactions in Chile’s food and beverage industry rose 57% in the first nine months of 2016 over the same period in 2015, according to TTR data (www.TTRecord.com).
The participation of foreign buyers in the space was constant between both periods, though inbound deals fell relatively, with four of seven transactions led by international bidders to the close of 3Q15, compared to four of 11 to the close of 3Q16.

Rankings / League Tables

Latin America Ranking – 2016*

Financial Advisory – Year to Date (YTD)

Banco Itaú BBA holds a comfortable lead in TTR’s Latin America financial advisory ranking at the close of 3Q16, with 28 transactions worth a combined USD 16bn. The region’s top bank is two deals behind by volume and 8% up by aggregate value on its nine-month performance to the close of 3Q15, when it also led the chart. Banco Bradesco BBI is up one position to take second place, its deal count up 140%, the combined value of its transactions leading the pack at USD 23bn. Banco BTG Pactual fell from second place a year ago to third, its mandates down 43% from 23 and aggregate deal value down 41% from USD 10.6bn. Banco Santander added four deals to its tally of eight a year ago to take fourth place, its aggregate value up 43% from USD 5.3bn to USD 7.5bn. Citigroup jumped 450% by volume and 440% by aggregate value to take fifth, after not placing among the top 10 investment banks in the region to the close of 3Q15. BAML is up one place to take sixth after adding four deals to its count of six a year ago and increasing aggregate value 882% to USD 12.2bn. BNP Paribas was absent from the top 10 ranking at the close of 3Q15 and now ranks seventh, tied with BAML by volume. BBVA is down two positions in eighth, despite adding two transactions to its count of a year ago and increasing aggregate deal value by 179%. Morgan Stanley, in ninth, and Vinci Partners, in tenth, were both absent from the regional top 10 chart a year ago.

Baker & McKenzie leads TTR’s Latin America legal advisory ranking at the close of 3Q16 with 18 transactions worth a combined USD 2.5bn. Baker also led the chart at the close of 3Q15, when the firm had advised on 27 deals together worth USD 2bn in the first nine months of the year. Jones Day follows in second, as it did a year ago, though deal volume is down by a similar 32%; its aggregate value is down 58%. Clifford Chance ranks third by volume with 10 deals and leads by aggregate value of USD 8.5bn. Clifford Chance closed 3Q15 ranked fifth with six deals together worth a similar USD 8.4bn. Cleary Gottlieb Steen & Hamilton, in fourth, and White & Case, in fifth, have the same deal count. Cleary was not among the top 10 a year ago, while White & Case fell from third, despite increasing volume from seven to 10 and growing aggregate value from USD 1.2bn to USD 1.8bn. Linklaters, in sixth, and Hogan Lovells, in seventh, were both absent from the chart a year ago. Shearman & Sterling lost one deal compared to its tally of a year ago and fell four positions to take eighth. Simpson Thacher & Bartlett also lost a transaction on its tally of a year ago, but held on to its ninth place ranking, nonetheless, the combined value of its deals down 56%. Skadden, Arps, Slate, Meagher & Flom is down two transactions and three positions in the chart, to pull up the rear with four mandates on deals worth USD 2.7bn, a 207% jump in aggregate value from USD 866m a year ago.

Brazil Ranking* – 2016
Financial Advisory – Year to Date (YTD)


Banco Bradesco BBI tops TTR’s Brazil financial advisory ranking at the close of 3Q16, one deal ahead of Banco Itaú BBA. With 24 mandates YTD, Bradesco is up 140% by volume, 122% by value on its performance for the nine-month period ending a year ago, when it ranked third. Itaú has slipped to second in the ranking, its volume down 15%, the combined value of its deals down 19%. At the close of 3Q15, Itaú led Banco BTG Pactual by 11 transactions and Bradesco by 16. BTG’s volume is down from 15 to 11, placing it in third, its aggregate value down 50% from 26 deals a year ago. BAML more than doubled its mandates in Brazil, climbing from tenth to fourth in the chart, its nine deals worth USD 10bn in aggregate compared to USD 1.2bn a year ago. Banco Santander ranks fifth with seven deals worth a combined USD 5.7bn, not having placed among Brazil’s top-10 financial advisors a year ago. Vinci Partners, in sixth, was also absent from the ranking at the close of 3Q15, and is now tied with Santander by volume, its seven deals together worth USD 455m.
BR Partners, in seventh, maintained its deal count of a year ago while falling two positions in the chart, the value of its six deals YTD worth USD 1.5bn compared to USD 256m in the first nine months of 2015. Rochschild is up by one deal and one place in the chart on its performance of a year ago, placing eighth with five mandates on transactions together worth USD 8.4bn, compared to four worth USD 7.7bn at the close of 3Q15. Magma, in ninth, and Cypress Associates, in tenth, were both absent from the top 10 a year and also have five deal mandates apiece at the close of 3Q16, together worth USD 33m and USD 3m, respectively.

Legal Advisory – Year to Date (YTD)


Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados leads TTR’s Brazil legal advisory ranking to the close of 3Q16, with a whopping 50 mandates YTD on transactions worth nearly USD 21bn combined. The leading transactional law firm in Brazil has climbed from second a year ago, when it had 10 fewer deals worth just under USD 11bn in aggregate. Machado, Meyer, Sendacz e Opice Advogados climbed from third a year ago to take second place, adding 11 deals to its count of 31 at the close of 3Q15. The combined value of its transactions fell 79% from a chart-leading USD 12.6bn to USD 2.7bn, meanwhile. Pinheiro Neto Advogados fell from first to third by deal count and places second among the top 10 by aggregate value, with USD 17.2bn in combined deals. Souza, Cescon, Barrieu & Flesch Advogados holds on to its fourth-place ranking of a year ago, with 35 deals worth USD 3.4bn combined, compared to 29 together worth USD 5.5bn at the close of 3Q15. TozziniFreire Advogados is up four positions from ninth a year ago to take fifth in the chart at the close of September. TozziniFreire increased its tally from 20 at the close of 3Q15 to 35 a year later, and bumped aggregate value up from USD 798m to USD 3.4bn. Stocche, Forbes, Padis, Filizzola, Clapis, Passaro, Meyer e Refinetti Sociedade de Advogados ranks sixth, after not placing among the top 10 M&A firms in Brazil in the first nine months of 2015. Barbosa, Müssnich, Aragão lost four deals from its tally of a year ago and fell one position in the chart to take seventh, closing 3Q16 with 21 mandates on transactions together worth USD 5.7bn, compared to 25 together worth USD 9.1bn to the close of September 2015. Not among the top-10 a year ago, Lefosse Advogados closes the quarter in eighth, with 19 mandates on deals together worth USD 7.7bn. Demarest Advogados is tied with Lefosse by deal volume, but follows in ninth for its lesser aggregate transaction value of USD 2.7bn. Veirano Advogados slid from fifth at the close of 3Q15 to tenth a year later, its deal volume falling from 26 to 17 while the combined value of its deals grew from USD 799m to USD 5.7bn.

Mexico Ranking* – 2016

Financial Advisory – Year to Date (YTD)

BBVA tops TTR’s Mexico financial advisory ranking at the close of September with seven deals together worth USD 3.3bn, up from four worth USD 869m a year ago, when it also led the chart.Citigroup climbed from eighth a year ago to runner-up, with four transactions YTD worth a combined USD 4.5bn, leading the top 10 by aggregate value. Deutsche Bank ranks third with two mandates at the close of 3Q16, tied by deal count with JPMorgan, in fourth, Morgan Stanley, in fifth, Lazard, in sixth, Credit Suisse Group, in seventh, and RIóN M&A, in eighth. Of the lot, only RIóN placed among the top 10 a year ago, when it ranked third. Goldman Sachs, in ninth, and PC Capital, in tenth, have advised on one transaction each in Mexico, YTD; both were absent from the top 10 chart a year ago.

Creel, García-Cuéllar, Aiza y Enríquez leads TTR’s Mexico legal advisory ranking at the close of September, with 18 mandates on deals worth a combined USD 3.3bn. The leading firm’s deal count compares with 21 together worth USD 13bn in the nine-month period ending a year ago, when it also stood at the top. Galicia Abogados added two deals to its tally to take second place with 12 mandates on transactions together worth USD 4.5bn. Mijares, Angoitia, Cortés y Fuentes slipped from second place a year ago, to third, its seven deals worth USD 1.8bn at the close of 3Q16, compared to 15 together worth 2.4bn at the close of 3Q15. Jones Day México is tied with Mijares by volume, with the same seven deals as a year ago. Ritch, Mueller, Heather y Nicolau, in fifth, was not among the top 10 a year ago, its six deals YTD together worth USD 1.8bn. White & Case México climbed two places in the chart to take sixth, despite static deal count and a 26% drop in aggregate value between the two periods. Santamarina y Steta Abogados, in seventh with five mandates YTD, and González Calvillo Abogados, in eighth with four, were both absent from the top 10 a year ago, as was Von Wobeser y Sierra, in ninth with four deals too. Basham Ringe y Correa slipped from seventh a year ago, to tenth, its deal count halved from six to three, its aggregate value down 93% from USD 1.4bn to USD 91m.

* TTR Rankings are generated with transactions announced or closed in 2016 year-to-date. The ranking includes sales and acquisitions of shares and of assets, creation of joint ventures, and Private Equity/Venture Capital investments. The legal advisor rankings for Brazil and Mexico take into consideration advisory services regarding domestic laws. All rankings only include deals where a company of the respective country was the target of the transaction. In the case of LATAM, it would be a Latin American country. The LATAM ranking does not specify the origin of the advisory law, so the filter only considers firms from the UK/US.

In case of a draw, the adopted criteria will be the following: if the draw is due to number of transactions, the total deal value prevails; if it is due to deal value, the number of transactions prevail. When a draw of both number of transactions and deal value occurs, the same position will be retained and the deals will be arranged alphabetically.

TTR Dealmaker Q&A – Moacir Zilbovicius

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TTR Dealmaker Q&A

September 2016

Kroton Educacional acquires Estácio Participações

USD 1.63bn

Moacir Zilbovicius
Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados

On 16 August 2016 Estácio Participações accepted Kroton Educacional’s USD 1.63bn takeover bid. Moacir Zilbovicius was part of the legal team at Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados that advised the seller in this monumental transaction.

Q: How did Mattos Filho land the advisory mandate and when was the firm retained?

A: We were engaged in the first week of June thanks to our relationship with Estácio’s board members and owing also to referrals from financial institutions involved in the deal.

Q: What prompted your client to explore strategic alternatives?

A: Both Kroton’s and Grupo Ser´s offers were unsolicited. As far as I know, Estácio was not pursuing strategic alternatives at the time. What ensued after Kroton’s offer was made public was basically the board members assessing the offer and pursuing the best alternative available for its shareholders.

Q: Beyond the economic factor, what made Kroton’s bid more enticing than Grupo Ser’s previous offer?

A: Several factors came into play, but, beyond the economic and strategic factors, one that played an important role was management´s assessment of the likelihood of shareholders from both companies approving the deal. 

Q: How does this transaction impact Brazil’s higher education landscape?

A: Both the Brazilian antitrust authorities and Ministry of Education are assessing the impacts of this deal, if any, and should issue their views on this, hopefully, sooner than later.

Q: What practice areas were critical in the deal and in what way did the transaction require Mattos Filho to employ its unique capabilities?

A: I am proud to say that Mattos Filho was involved in almost all of the recent merger transactions involving public companies in Brazil. This gives us not only a competitive edge, but also relevant know-how and expertise in handling such complex transactions. We have also actively participated in numerous deals involving corporations with no controlling shareholder or group, which enabled us to provide Estácio’s management with the specific guidance it needed to handle the unique situation it found itself in. Obviously, addressing the antitrust circumstances involved in the transaction was also highly important. We have a highly specialized antitrust group that allowed us to live up to the task at hand.

Q: What antitrust hurdles does the transaction face?

A: Though the deal was approved in the general shareholders meetings of both companies, it remains subject to the approval of the Brazilian antitrust authorities and Ministry of Education. The businesses of Kroton and Estácio are very complementary, in particular from a geographic standpoint, and the parties are confident that the necessary antitrust approval will be obtained in due course. 

Q: What distinguished this transaction from other M&A deals Mattos Filho has advised on?

A: The fact that it involved two companies with no controlling shareholder or group of shareholders, and that it was prompted by an unsolicited offer that led to competing offers from the market, and almost the launching of a tender offer by a relevant shareholder and member of the target´s board, made the deal very unique.

Q: How is the legal advisory work different in such a transaction where there is no controlling shareholder? 

A: Our work was mainly focused on advising the board of directors and the special committee that was created specifically to negotiate the transaction with Kroton.

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Indústria de moda e têxtil acelera consolidação

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BRASIL

 O TTR Deal Tracker Brasil é um email mensal que contém tendências do mercado transacional  brasileiro, além de incluir um ranking  Year to Date (YTD) dos principais assessores jurídicos e financeiros.

BRASIL: Indústria de moda e têxtil acelera consolidação

No período de janeiro a agosto de 2016 o número de transações envolvendo empresas que atuam na indústria de moda e têxtil apresentou um aumento de 167%  se comparado ao mesmo período de 2015, segundo os dados do TTR (www.TTRecord.com). Apesar do aumento do número de transações ainda predominam transações onde apenas empresas brasileiras realizam aquisições, com seis transações registradas em 2016 YTD  e duas registradas no mesmo período de 2015.

Rankings / League Tables

Brasil Ranking – 2016

Assessoria Financeira – Year to Date (YTD)

O Banco Itaú BBA lidera o ranking TTR de assessoria financeira em 2016 Year to Date com 22 mandatos e um valor total de USD 11,6bi, apenas um mandato a menos quando liderou o mesmo ranking há um ano atrás com um valor total de USD 14bi. O Banco Bradesco BBI subiu da terceira posição de um ano atrás para a segunda posição com 21 mandatos e valor total de USD 12,5bi, o que representa aumento de 250% em volume e 37% em valor. O Banco BTG Pactual desceu da segunda posição que ocupou há um ano atrás para a teceira, com 11 mandatos e um valor total de USD 4,6bi. O Bank of America, em quarto, não esteve entre os dez primeiros do ranking no mesmo período de 2015, tal como Vinci Partners, em quinto, Banco Santander, em sexto, e Rothschild em sétimo. O BR Partners desceu da sétima posição ocupada há um ano atrás para a oitava, com 5 mandatos e um valor total de USD 1,3bi, valor 625% maior do que o ano anterior. O Morgan Stanley, em nono, e BNP Paribas, em décimo, não ocuparam as dez primeiras posições do ranking do mesmo período de 2015.

Assessoria Jurídica – Year to Date (YTD)

O Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados lidera o ranking TTR de assessoria jurídica com 34 transações e um valor total de USD 14,7bi, o que representa um aumento de 48% no volume e de 65% no valor total, se comparado ao ranking do mesmo período do ano passado, quando ocupou a quarta posição. O Machado, Meyer, Sendacz e Opice Advogados ocupa a segunda posição, a mesma do ano passado, porém com um aumento de 25 para 32 transações e um redução de 86% no valor, de USD 12,5bi para USD 1,8bi. O Pinheiro Neto Advogados ocupa a terceira posição, mesmo tendo mantido um volume de 31 transações, que garantiu a primeira posição no ranking de um ano atrás. O TozziniFreire Advogados subiu da oitava posição ocupada há um ano atrás para a quarta posição com um volume de 31 transações e um valor total de USD 1,8bi, o que representa um aumento de 122% no valor total. O Souza, Cescon, Barrieu & Flesch Advogados manteve a quinta posição, mesma ocupada há um ano atrás, mesmo tendo um aumento de 26% no volume, de 23 para 29 transações. O Barbosa, Müssnich, Aragão desceu três posições no ranking, passando a ocupar a sexta posição com 18 transações e valor total de USD 5,7bi, valor 38% menor do que o registrado há um ano atrás. O Stocche, Forbes, Padis, Filizzola, Clapis, Passaro, Meyer e Refinetti Sociedade de Advogados ocupa a sétima posição, não tendo estado entre os dez primeiros do ranking de um ano atrás. O Veirano Advogados ocupa a oitava posição, duas a menos em relação ao ranking do ano passado, com 17 transações e valor total de USD 5,7bi. O Demarest Advogados manteve a nona posição que ocupava no ranking do ano passado, desta vez com 17 transações e valor total de USD 2,4bi. O Lefosse Advogados ocupa a décima posição, depois de não ter estado entre os 10 primeiros do ranking há um ano atrás.

* Os Rankings TTR deste report são elaborados com transações anunciadas e/ou concluídas em 2016 Year to date. Estão incluídas transações de investimento e desinvestimento de Private Equity / Venture Capital, compra/venda de ativos e formação de Joint Ventures. Os Rankings de assessores jurídicos do México e do Brasil consideram apenas assessorias nas respectivas leis locais. Em todos os rankings são considerados apenas deals onde alguma empresa do respectivo país tenha sido target na transação, no caso do ranking LATAM, algum país latinoameircano. No ranking LATAM não há especificação sobre a lei da assessoria, além disso o filtro considera apenas firmas de UK/US.

Em caso de empate o critério de desempate é: empate por número de transações, se desempata com o valor total; empate por valor total, se desempata por número de transações. E quando exista um empate em número e valor, será mantida a mesma posição e a ordem será alfabética.