August 24, 2018 / 10:54 PM / 2 months ago

Brazil's Arco Platform seeks to raise up to $200 mln in IPO -source

SAO PAULO, Aug 24 (Reuters) - Brazilian learning systems company Arco Platform should raise up to $200 million in an initial public offering on Nasdaq expected in September, one source with knowledge of the matter said on Friday.

The company will only issue new shares, in a so-called primary offering, and the amount raised will go to Arco’s coffers. The company will use the proceeds of the offering to fund acquisitions, according to a document the company filed on Tuesday with the Securities and Exchange Commission.

A for-profit education company, Arco was founded in 2004 and sells learning systems to 1,140 Brazilian private schools with more than 400,000 students, according to the filing. Arco’s content is delivered to schools through both digital and hard copies.

Investment firm General Atlantic LLC has a 26 percent stake in the company, which also has among its shareholders Arco’s founding family Sá Cavalcante.

Arco posted a net income of 54.3 million reais ($13.88 million) in the first six months of 2018 and a net revenue of 195.1 million reais.

The company has hired the banks Goldman Sachs, Morgan Stanley, Itaú BBA, Bank of America Merrill Lynch, Allen & Company, BTG Pactual and UBS to manage the offering.

A second source said banks would like Arco to raise the size of the offering to up to $300 million, but the company prefers to keep it smaller. ($1 = 3.9122 reais) (Reporting by Carolina Mandl Editing by Chris Reese)

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