Brazilian fund manager Vinci Partners has announced a merger with Chilean company Compass Group in a deal valued at around US$160 million. Vinci Partners, with a market capitalization close to US$580 million, will combine its business with Compass to create a Latin American manager with over US$50 billion in assets under management, surpassing Compass’s current assets of US$37 billion.
The transaction involves two payments: first, 11,783,384 million common shares of VINP class A, valued at approximately US$121 million. In addition, the Chilean partners will receive US$31.3 million in cash in the form of redeemable common shares of VINP Class C. With these payments, Compass is valued at US$160 million.
The Chilean partners will hold up to 25% of Vinci Partners’ shares and will be entitled to an additional 7.5% participation in the combined entity, subject to certain objectives being met by 2028. Compass executives and senior management will remain in their current positions following the merger.
The closing of the transaction is expected to occur in the third quarter of 2024, subject to regulatory approvals. Vinci Partners CEO Alessandro Horta stated that the merger with Compass is a significant milestone in their long-term strategic growth plan, expanding their presence in Latin America’s alternative asset market.
Both companies highlighted the growth opportunities in Latin America through the merger and emphasized the alignment of strategic plans for geographic expansion and distribution reach. The merger is expected to result in increased earnings per share, income, and productivity synergies for Vinci Partners.
Goldman Sachs served as financial advisor to Vinci, while Morgan Stanley advised Compass on the transaction. The merger represents another example of Brazilian investors entering the Chilean capital market, following previous acquisitions such as BTG Pactual’s purchase of Celfin Capital and Itaú’s merger with CorpBanca.
The acquisition of Compass adds to Vinci Partners’ diverse investment platform, which includes private equity, real estate, private credit, and infrastructure. Vinci’s revenue surpassed Compass in 2023, with a higher margin, reflecting the potential for growth and profitability in the combined entity.