December 6, 2022

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Privalia wants to leave Brazil for 1 billion Rls: who can buy it?

Privalia wants to leave Brazil for 1 billion Rls: who can buy it?

Today we will be commenting on another Hapvida (HAPV3) acquisition and exit from Privalia’s operations in Brazil.

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See analysis by Felipe Bevilacqua, analyst and co-founder of analysis house Levante Ideias de Investimento. Every day Bevilacqua delivers news and analysis from publicly traded companies so you can make the best investment decisions. This content is exclusive to subscribers UOL.

Hapvida buys Octaviano Neves Hospital and Maternity Hospital

After Cade (Administrative Council for Economic Defense) refused to take over Plamed healthcare portfolio, Hapvida (HAPV3) About the purchase of 100% of the Octaviano Neves Maternity Hospital R$134 million, including the property where the hospital is installed.

Hapveda announced in a statement that the Octaviano Neves Hospital provides medical and hospital services in a prime location in Belo Horizonte, Minas Gerais state. In addition, it has a highly qualified structure to provide maternity services, emergency care, clinical analysis laboratory and diagnostic imaging service. In terms of operational beds, the company has 156 beds, including 45 intensive care rooms.

Hapveda reports that the acquisition is in line with the company’s regional growth strategy, which currently has 320,000 beneficiaries in health plans, with just 16% penetration in Belo Horizonte.

We believe the news is positive for Hapvida, which is pursuing an organic growth strategy and across acquisitions, particularly in an area where the company already has a proven structure, facilitating synergies between businesses. Another positive point was the amount paid by the beneficiaries (about R$419 per beneficiary), which is much lower than other acquisitions made – upon the acquisition of Viventi, about R$2.2 thousand per beneficiary). The purchase should also not harm Hapvida’s net debt.

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At the moment, the main catalyst for the company’s actions remains the merger with Grupo NotreDame Intermédica (GNDI3), which is currently subject to Cade approval.

Privalia wants R$1 billion to do business in Brazil

Privalia, one of the largest e-commerce platforms in Brazil, has offered to sell in the country. The company is asking R$1 billion for the deal, about 16 times more than the 2020 Ebitda (earnings before interest, tax, depreciation and amortization).

The company even filed for an initial public offering (an initial public offering of shares, its English acronym) in B3 in April this year, but suspended the offer in July, due to the deteriorating market environment. Prior to the IPO, he was going to start talks with some online retailers to negotiate the sale of the operation, but the process did not progress.

Privalia is an e-commerce platform focused on flash sales, an ecosystem-based model that connects popular brands with engaging consumers, through discounts and a premium shopping experience.

Founded in Barcelona in 2006, the company began operations in Brazil in 2008. In 2016, it was acquired by French retailer Veepee, becoming a wholly owned subsidiary, in a move that included the Brazilian operation.

In addition to the fashion sector, Privalia operates in nine other sectors: pets, footwear, home and decor, children, accessories, sports, wine and gastronomy, beauty and electronics. In the third quarter, net revenue grew by 7.1%, reaching the amount of R$ 728.8 thousand, with a total revenue of R$ 1.01 million.

Veepee, the French group that controls Privalia, has been wanting to be out of operation for some time now, having sold Privalia in Mexico to Axo Group. As negotiations progressed, the controlling company no longer operated in emerging markets, and began to control only business in Europe, operating in Spain, France and Italy.

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To sell business in Brazil, Privalia hired Itaú BBA, which was presenting current business conditions for interested companies. Companies such as Magazine Luiza, Mercado Livre, Americanas, Lojas Renner and Dafiti are potential buyers.

Lojas Renner could be a potential buyer for the company, as it has strong cash flow for new and large acquisitions and has plans to expand the company’s digital image. The retailer achieved good results in the third quarter, as it recorded a net cash of 2.42 billion Brazilian reais, as a result of issuing 102 million new shares, with a value of approximately 4 billion Brazilian reals in the second quarter.

Magazine Luiza has recently entered the fashion sector, announcing that a business plan for the group’s market is underway, which includes creating its own clothing brand. The strong increase in digital competition has led already well-established companies in the sector, such as Lojas Renner and Americanas, to search for partnerships and study new M&A projects.