CORRECTED-KKR battling over Brazil acquisition with sellers, bank -sources

miércoles 12 de octubre de 2016 18:43 GYT
 

(Corrects paragraphs 3, 9, and 10 to specify that acquiring vehicle and not KKR itself halted payments on debt)

By Tatiana Bautzer

SAO PAULO Oct 12 (Reuters) - KKR & Co LP's ill-fated takeover of a Brazilian data center provider has embroiled the private equity firm in a battle with the sellers in the deal as well as a key lender as it struggles to unwind the transaction on its own terms.

KKR's first-ever direct investment in Brazil, which entered its deep recession the year the takeover closed, underlines the hazards of acquisitions in Latin America's largest economy, especially for foreign investors less familiar with its workings.

The showdown over Sao Paulo-based Aceco TI has KKR accusing its former owners of concealing bribery and accounting fraud at the time of the 2014 sale. Pending the outcome of that dispute, Auckland, the holding company through which KKR acquired Aceco, has also halted payments on the bank loans that financed the deal, infuriating key lender Banco Bradesco, people familiar with the dispute said.

While KKR blames the alleged wrongdoing for a slump in Aceco's revenues and profits since the takeover, the sellers - rival private equity firm General Atlantic and Aceco's founding Nitzan family - claim the problem was mismanagement and bad timing.

In an e-mailed statement to Reuters, former Aceco Chief Executive Jorge Nitzan denied the allegations of wrongdoing and said KKR's "investment timing could not have been worse and was exacerbated by post-acquisition mismanagement".

"Now, KKR is trying to undo the deal and blame others for its mistimed acquisition," Nitzan, a member of the family that founded Aceco, said in the statement.

KKR spokeswoman Kristi Huller said in a statement that "management wrongdoing" was the real cause of Aceco's woes.   Continuación...