New York-based private equity firm, Warburg Pincus, has acquired a 31.75% stake in Brazil’s Camil Alimentos S.A., one of the leading packaged food companies in Latin America, from Fundo de Investimento de Participações Camil, an equity investment fund managed by Gávea Investimentos, for an undisclosed amount.
Originally founded in 1963 as a rice distributor, Camil has diversified over the years across both food categories and geographies. With beginnings specializing in rice and bean production, the company acquired Femepe Industria e Comercia do Pescado in 2011 and acquired tuna and sardine company Coqueiro five months later, making it the second biggest canned fish company in Brazil behind Calvo Group’s Gomes da Costa, according to Undercurrent News. The group also has a portfolio of brands spanning sugar in Brazil, and rice in Chile, Brazil, Peru and Uruguay.
“The Camil team has established a strong footprint across the region and we look forward to supporting the Company to leverage opportunities for further growth,” said Piero Minardi, Director and Head of Brazil, Warburg Pincus.
Over the past decade, Camil has built out its group through the successful integration of 15 acquisitions, the formation and strengthening of a wide-reaching distribution network, and has gained a position from which to pursue further consolidations within the Latin American food sector.
This build-up however, had left the company with debt that became increasingly unmanageable over the past six years. In September 2014, the group hired BTG Pactual to facilitate a sale with an eye toward a possible deal with Cargill, Archer Daniels Midland, or Noble, according to 2014 reporting by Undercurrent News. Knowing it would be a challenge, the group considered selling the company’s rice, sugar, and canned seafood divisions separately. However, it very well might have been the potential in the canned seafood sector that drew Warburg Pincus to the deal.
In January of this year, Pricewaterhouse Cooper Director, Antonio Zarzalejos told Undercurrent News that the canned tuna sector in Latin America was set for more consolidation in the near future. Valued at $1.5 billion, and with an annual growth rate of 3% per year and strong consumption dynamics, the canned seafood sector in Latin America displays great potential for growth.
“In Latin America there are many countries where consumption per capita is still low and it can only grow,” Zarzalejos said.
For the fiscal year 2016, the company posted net revenues exceeding BRL4 billion (US$1.22 billion) with earnings before interest tax, depreciation, and amortization (EBITDA) of BRL423 million (US$130.5 million).
Camil will join Warburg Pincus’ active portfolio of more than 120 diversified companies that span various sectors, geographies, and growth stages representing more than $40 billion in assets under management. Founded in 1966, the firm has raised more than 15 private equity funds, through which the firm has invested more than $55 billion in 750 companies across 35 countries. Previous investments made by the firm in Brazil include Banco Indusval & Partners, Grupo GPS, Omega Energia Renovável, Petz (formerly Pet Center Marginal), Restoque, and Sequoia Logistica.
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Lynda Kiernan