Steel Acquisition Pushes BTG Over Itau in Brazilian M&A Rankings
January 11, 2012, 2:41 AM ESTBy Cristiane Lucchesi
Jan. 10 (Bloomberg) -- Banco BTG Pactual SA’s advisory work on a $2.5 billion steel-industry acquisition in the final weeks of 2011 pushed the lender over Banco Itau BBA SA and into the No. 1 spot among merger advisers in Brazil for the year.
BTG Pactual, based in Sao Paulo, advised on deals totaling $39.1 billion, data compiled by Bloomberg show. Itau, which led the rankings through early December, fell to second for the year with $36.7 billion of transactions, while Rothschild, the top adviser in 2010, dropped to sixth with $23.4 billion.
BTG Pactual, owned by billionaire Andre Esteves, handled 47 M&A deals during 2011, including the purchase of a stake in steel-producer Usinas Siderurgicas de Minas Gerais SA by Ternium SA and Confab Industrial SA. The transaction was announced at the end of November and included in the rankings last month. The bank also advised on the $648.3 million takeover of Brazilian Finance & Real Estate SA by BTG Pactual and its Banco Panamericano SA business, announced in December.
“We do have a robust pipeline,” said Guilherme Paes, the head of investment banking at BTG Pactual. He said deal volume could grow 20 percent to 30 percent this year if there are no disruptions caused by Europe’s sovereign-debt crisis.
Competition between BTG Pactual, Itau and international financial institutions may intensify this year, as the number of transactions increases and the size of individual deals continues to decline. Brazilian M&A deals grew to 710 in 2011 from 555 in 2010 and volume fell to $99.9 billion from $161 billion. The average size declined to $237.9 million from $470.9 million, the data show.
‘Quite Active’
“The M&A market was quite active in 2011, and despite the current global macro uncertainties we expect activity to remain sustained in 2012,” Jean-Marc Etlin, chief executive officer of Itau BBA’s investment bank, said in an interview.
BTG was the seventh-largest M&A adviser in 2009 and fourth in 2010 after the bank hired some of the most experienced executives in the industry from Zurich-based Credit Suisse Group AG, including head of M&A Marco Goncalves.
“Today we have the biggest execution team for M&A in Brazil, with six senior executives,” Goncalves said in an interview, adding that he expects direct investments in Brazil to continue from Asia, especially China, Japan and Korea.
BTG Pactual advised the controlling shareholders of Schincariol Participacoes e Representacoes SA, which in August sold their 50.45 percent stake in the company to Japanese brewer Kirin Holdings Co. for 3.95 billion reais, or about $2.5 billion at the exchange rate when the deal was announced.
The price was about 21 times the company’s Ebita, or earnings before interest, taxes and amortization, according to BTG Pactual’s Paes.
“The clients are happy with our service, with the valuation they get from us,” Paes said.
--Editors: Steve Dickson, Dan Reichl
To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
