In a presentation to investors, the company pointed out about its business in the South American giant: “Possible M&A in project to strengthen our presence in the country.”
Cencosud could finalize a new purchase in Brazil. This was revealed by the company controlled by the Paulmann family in a presentation to investors, in which it was highlighted that, in the third quarter, the firm registered its highest annual income since 2015, with a double-digit Ebitda margin, the best in a decade.
Regarding its business in Brazil, the company pointed out that it is “taking advantage of opportunities” through the wholesale format, also known as cash & carry.
The company pointed out that, in the third quarter of the year, 27 of its stores in the South American giant (it operates 200 supermarkets in that country) were transformed to the cash & carry format, “the most successful in Brazil today,” he said.
Then he pointed to an eventual new merger and acquisition (M&A) to continue taking a larger share of the market in Brazil. “Possible M&A in project to strengthen our presence in the country,” said the company.
The group controlled by the Paulmann family is planning to sell a part of its subsidiary in Brazil on the Sao Paulo Stock Exchange, an operation in which it aims to raise some US $ 300 million.
The original plan was to finalize the Initial Public Offering (IPO) of shares between March and July 2021, which did not happen. Then, it was expected for the second semester, which did not materialize either. At the end of October, the firm confirmed the postponement of its stock market debut in the South American giant, without giving an estimated exit date. He only pointed out that it will be when market conditions warrant it.
What is clear is the destination of the fresh resources. “The company intends to use the net proceeds from the IPO in accordance with its business plan for: (i) possible mergers and acquisitions (M&A) transactions; (ii) opening of new stores and remodeling of existing stores; and (iii) investments to leverage e-commerce and the CRM and logistics platform, ”the company said in its preliminary prospectus for the IPO.
The firm has a plan in Brazil for US $ 180 million until 2023 to renovate all the stores and “continue with the expansion.”
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