(Reuters) April 30, 2012 – BTG Pactual, Brazil’s largest independent investment bank paid an undisclosed sum to join the controlling bloc of Brazilian fitness chain BodyTech, seeking to tap into the nation’s growing health-conscious middle class.
To read an article in Portuguese about the deal, please visit Folha.com.br
In a joint statement, São Paulo-based BTG Pactual’s merchant banking unit and BodyTech did not provide details on terms of the transaction, including the stake that had been purchased. BodyTech is South America’s largest fitness chain by revenue, which is seen rising rise 67 percent to 280 million reais ($149 million) this year.
Members of BodyTech’s controlling bloc include Chief Executive Luiz Urquiza, entrepreneur Alexandre Accioly and João Paulo Diniz, the son of retail tycoon Abílio Diniz. Management will stay while BTG Pactual vowed to support BodyTech’s growth plan in different aspects, the statement said.
“The partnership with BTG Pactual will help us accelerate growth, boost our know-how and attain synergies with other activities in the health business,” Urquiza, also a partner at BodyTech, in the statement.
BTG Pactual’s private equity arm is stepping up acquisitions of consumer-related companies in Brazil, where the emergence of about 40 million people from poverty over the past decade has sparked a boom in demand for fitness, entertainment and healthcare services. Brazil is the world’s second biggest market for gyms, but only the 10th in terms of revenue, BTG Pactual said.
Enrollment has risen at an average compound rate of 12 percent a year since 2007, totaling 5.5 million people signed up for fitness chains, the statement said.
The deal took place less than a week after BTG Pactual, controlled by billionaire financier André Esteves, raised $1.99 billion in Brazil’s first IPO of an investment bank. Since being founded in 2009, BTG Pactual’s buyout unit has purchased stakes in Mitsubishi Corp’s car assembly plant in Brazil, car parking company Estapar, hospital chain Rede D’or and commercial real estate developer BR Properties.
Private equity firms are flush with cash after raising more than $7 billion for their Brazil investments last year. Three out of four Latin American private equity-led mergers and acquisition deals last year took place in Brazil, industry group LAVCA said last month.