Mergers and acquisitions (M&A) serve are pivotal instruments in corporate strategy. Organizations merge with or acquire other companies to achieve a range of objectives: to expand, to diversify, to achieve economies of scale and cost synergies, to mitigate risk, to access talent, to improve financial performance, to create shareholder value and many others.
We advised ACP Bioenergia in two unique moments in its corporate history. The first was a sale of a minority equity stake at Conquista do Pontal Mill (“UCP”) to Atvos (formerly ETH Bioenergia) – currently one of the three largest sugarcane processing groups in Brazil. The second was an equity injection in ACP from Dimitrios Markakis.
CZ Approach
Minority Stake Sale at UCP
In early 2006, the Cândido de Paula family began developing a sugar and energy mill, the Conquista do Pontal Mill (“UCP”). In November of the same year, ETH Bioenergia (now Atvos) acquired 80% of UCP from the Cândido de Paula family. With the acquisition by ETH Bioenergia, the UCP project began development and in 2009 the mill was inaugurated. ACP retained a minority stake and was the largest sugarcane supplier to the mill.
The remaining stake UCP was sold in 2015 to the majority partner, with CZ acting as ACP’s exclusive financial advisor in this transaction, concluding this phase of the project’s development. ACP remains the main supplier of sugarcane to the mill.
ACP | Equity Injection
CZ acted as ACP’s exclusive financial advisor in an equity injection deal by Dimitrios Markakis. The equity injection not only directly supported ACP’s growth plan, but it also provided strength for the company to attract competitive financing lines for its expansion.
Using the words of ACP’s shareholders: “We had two options: either we stayed as we were, or we continued to grow, as we have in recent years. We decided to keep growing because we aim to become the largest in the market. However, to achieve this, it was no longer feasible for us to go it alone.”
CZ Solution:
We used our extensive in-house corporate finance expertise on M&A:
- Economic feasibility study (valuation) of the Project;
- Using our deep network and relationships in the sector, we screened and attracted investors interested in the transactions;
- Preparation of the transactions’ marketing materials;
- Coordination of Due Diligence;
- Negotiation of Definitive Documents;
- Coordination of the Signing of Binding Documents (Signing);
- Monitoring of Conditions Precedent for Closing.
Find below media coverage of the deal (Valor Econômico)
Client quote…”ACP and CZ have been working in partnership for more than a decade in the most varied types of capital structure operations… CZ’s corporate finance team were fundamental to the success of the strategic transactions concluded by ACP in recent years and will continue to be for the next ones to come.”
Alexandre Cândido, CEO, ACP
Outlook
These transactions were landmarks in the ACP’s corporate strategy and helped the company to implement its expansion plan to grow from a single production hub of ~500,000 tonnes of cane per crop in São Paulo state in 2013 to reach 7 production hubs in 5 Brazilian states producing 2.3 million tonnes of sugarcane, 0.6 million bags of soybean and 0.3 million bags of corn in 2022.
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