19 de abril de 2017 / 17:52 / en 4 meses

DEALTALK-Brazil port M&A frenzy proves not cheap for MSC, Dubai World

 (For more Reuters DEALTALKS, click on            )
 (Adds port privatization details, updates comments)
    By Tatiana Bautzer and Guillermo Parra-Bernal
    SAO PAULO, April 19 (Reuters) - Dubai Ports World Co and MSC
Mediterranean Shipping Co SA are seizing on Brazil's
three-year-long recession and rising debt levels among local
port operators to bid for marine terminals in one of the world's
top commodity exporters. But their plan will not come cheap.
    Half of the 12 terminal and port sales negotiated in Brazil
since January 2016 came at a premium to other similar deals in
the region. Now people familiar with three of the six ongoing
port deals in Brazil are expecting potential sellers to fetch
premiums of 20 percent or more for their maritime terminal and
port assets.
    Ports have gained extra allure in the wake of government
steps to privatize infrastructure in Latin America's largest
economy, even if global maritime activity remains tepid. Brazil
has about 37 state-owned ports and 180 privately-held marine
terminals.
    Foreign players perceive Brazilian port operators as less
prone to facing roadblocks than other infrastructure segments,
said Eleven Financial Research chief strategist Adeodato Volpi
Netto.
    A record grain crop and a gradual economic recovery should
keep ports and terminals busy, potentially accelerating M&A
activity before valuations climb further. The value of port
acquisitions in the Americas averaged 8.9 times expected
earnings before interest, tax, depreciation and amortization
(EBITDA) in the first quarter, data compiled by Thomson Reuters
showed.
    "Timing seems right for these deals as interest from global
players in Brazil's port industry keeps growing," Volpi said. 
    MSC is offering partner TPI Triunfo Participações &
Investimentos SA            the equivalent of 12 times expected
EBITDA for a 50-percent stake in the PortoNave terminal and a
nearby cold storage unit, three people familiar with the talks
said.
    After ending talks to buy Advent International Corp's 50
percent in TCP Terminal de Contêineres de Paranagua SA due to
price issues, DPWorld is close to buying out partner Odebrecht
SA's 66-percent stake in the Embraport terminal at similar
multiples, the people said. The deal has taken longer to close
because of Odebrecht's involvement in a Brazil graft scandal,
they said.
    Valuations remain resilient even for mature value plays like
TCP. According to the people, China Merchants Group Ltd
           would be willing to pay slightly more than 13 times
expected 2017 EBITDA for Advent's stake in TCP, valuing it at
3.5 billion reais ($1.1 billion), the people said.             
    MSC, Advent, Triunfo, Odebrecht, China Merchants, DPWorld
and Odebrecht all had no immediate comment. 
    
    MORE TARGETS SEEN
    The sources spoke under the condition of anonymity, citing
confidentiality accords surrounding the deals. 
    Porto Itapoá and liquid bulk terminal AGEO Terminais e
Armazéns Gerais SA are among potential targets, the people said.
Brazil's D'Avila family is also considering selling Terminal
Portuario de Itajai SA, or Teporti, one person said.
    AGEO's owner Cynara Ruiz hired Banco Santander Brasil SA
            and Banco Bradesco SA            to look for buyers,
two people said. Battistella Administração & Participações SA
           and BRZ Investimentos SA-led funds are on the way to
hire financial advisers to sell Itapoá, one person said.
    AGEO, Itapoá, Teporti and the banks did not have any
comment.
    Brazil's port industry is undergoing deep changes, with
returns seen declining as shipping firms gain in scale through
M&A. Maersk Line            , the world's No. 1 shipping
company, last December announced plans to buy smaller rival
Hamburg Sud, which may put pressure on rates, the sources said. 
    Competition has especially increased in the Santos port,
Latin America's largest, hampering profits for container
players. New terminals began to operate in the Santos port in
2014, when the economy slumped into recession - leading to a
supply glut that only worsened as demand declined.
    Reuters reported on Monday that the Brazilian government has
changed plans and is considering selling rights to operate the
port of Vitoria as part of the ongoing infrastructure
privatization plan.             
    ($1 = 3.1149 Brazilian reais)

 (Editing by Andrew Hay, G Crosse)
  

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