Viveo priced its follow-on at BRL 21.21, raising funds that will help the medical supplies distributor improve its capital structure and prepare for new M&As.
The price is about a 3% discount from where the stock was trading when the offer was announced on July 20.
Demand was R$3 billion at various price levels and came from more than 50 investors, according to a source familiar with the matter.
In the base offering, Viveo raised R$800 million with the sale of 36.6 million new shares.
In the end, DNA Capital — until now the company’s controller — decided to exercise 75% of the hot issue, selling BRL 400 million and raising the total offer to BRL 1.2 billion.
With the offer, DNA reduced its stake in Viveo from 58% to 44% of the capital. Only shareholders of the manager sold the share in the offer, with the Bueno family and DNA executives maintaining their positions, according to the person familiar with the matter.
Dynamo, which was already a Viveo shareholder with 5.5% of the capital, invested more than the priority offer, raising its stake to between 6% and 7% and giving a vote of confidence in the company that helped to attract new investors.
GIC — which anchored Viveo’s IPO in 2021 and has doubled its share with purchases in the market since then — maintained its stake at around 14% of the capital.
Two-thirds of the offer came from Brazilian investors and the rest from international asset managers. Long only funds dominated the book (66%), and the other third came from hedge funds, whose profile is more short-term but contribute to the security’s liquidity.
With the secondary offering, Viveo expects its liquidity to go from the current R$4-5 million per day to around R$30 million/day.
“They delivered a lot of results since the IPO, with several M&As and a significant improvement in the margin that tripled EBITDA,” said a source involved in the offer. “But due to the low liquidity, this growth was never reflected in the stock. They understood that as long as there was no more liquidity, the stock would not move.”
The primary proceeds will improve the company’s capital structure and make it ready for new M&As. At the roadshow, one of the main questions from investors was about a potential merger with Elfa, the distributor of medical supplies controlled by Pátria and which was recently subject to a capital increase of R$ 620 million.
Given the size of the two companies and the potential synergies, the merger would make a lot of sense, but sources close to Viveo say talks are not yet underway.
The company said at the roadshow that it has a robust pipeline of companies that could be acquired, including sectors in which it does not operate today.
The follow-on is Viveo’s first since its IPO two years ago, when the company raised BRL 700 million at BRL 19.92/share and was valued at BRL 5.5 billion.
Since the IPO, Viveo has made 17 acquisitions, spending around R$2 billion. CEO Leonardo Byrro has been telling the market that 2023 will be a year focused on integrations and capturing synergies – and that he plans to deliver EBITDA synergies of R$111 million between this year and next year.
Peter Arbex