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Latin America M&A Value Up in 2015

By on January 20, 2016

SAN JUAN – The value of mergers and acquisitions (M&A) targeting companies based in Latin America, including tax havens, increased for the second consecutive year to $321.1 million in 2015, according to information collected by the M&A database Zephyr. By contrast volume declined for the second year in a row, falling 8 percent from 3,049 deals in 2014 to 2,792 deals in the year under review, which suggests higher deal valuations over the last 12 months.

The largest transaction in the region recorded in 2015 by Zephyr was NXP Semiconductors’ acquisition of Bermuda-incorporated and Texas-based semiconductor manufacturer Freescale Semiconductor for $16.7 million in December. This was followed by True Thrive’s agreement to pick up Qihoo 360 Technology, a Cayman Islands-based antivirus software developer, for $9.3 million in December. True Thrive was backed by a large consortium of investors, including Sailing Capital Management, and closing is expected in the first half of 2016, subject to shareholder approval.

The largest deal targeting a non-tax haven country was worth $7.4 million and involved CRH buying Brazilian and Mexican assets belonging to Holcim and Lafarge, among other international assets. All of the top 20 deals by value were worth over $2 million, while the top five reached values in excess of $6 million.

The Cayman Islands led the way by both volume and value with 804 deals worth a combined $113.1 million in 2015. This represents the country’s highest valuation since before 2008 and is 71 percent higher than the $66.2 million recorded in 2014. Bermuda was second by value with $67.1 million, also its largest result of the last seven years, followed by the British Virgin Islands ($48.1 million). Brazil was the best-performing non-tax haven country, despite its total value falling 41 percent to $47.6 million in 2015, resulting in it placing fourth by value; the country ranked second by volume with 544 deals.

The Zephyr database shows that in keeping with the M&A pattern, private equity and venture capital (PE and VC) value increased by 40 percent to $32. million, while volume fell 32 percent to 239 deals in 2015 (2014: 354 deals worth $25.2 million), according to Zephyr. In all six of the top 20 PE and VC deals by value were worth over $1 million and these deals combined represented around 62 percent of total PE and VC value ($32.28 million) in 2015.

Lisa Wright, Zephyr director, commented, “Latin American M&A value has increased for the second consecutive year against a drop in volume, suggesting higher individual considerations for the year and proving that a recovery is well and truly underway after a disappointing 2013. Although volume was down year-on-year, this was in line with the overall global trend for 2015 and the fact that some sizable deals were announced over the course of the 12 months will be a cause for much optimism in 2016.”

The Latin America and Caribbean region covers companies in Anguilla, Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Belize, Bermuda, Bolivia, Brazil, British Virgin Islands, Cayman Islands, Chile, Colombia, Costa Rica, Cuba, Curacao, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Sint Maarten, Suriname, Trinidad and Tobago, Uruguay, and Venezuela.

Online: See the full report.

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