M&A

It is very common to hear statements from foreign funds and companies such as: “Brazil is a very hard country to do business in.” We also hear complaints like: “The red tape and the economic, political and legislative uncertainties make M&A in Brazil unfeasible.”

After hearing the same challenges so many times, we ask ourselves: why, at the height of the economic crisis, between 2017 and 2018, did M&A operations break records? Why were 53 transactions carried out in January 2019 alone, 13% more than in the same month last year?

Our conclusion is simple: the only reason the total number of M&A transactions in Brazil is not higher is because Brazilian companies, especially those in the middle market (30MM to 300MM in annual revenue), are unable to meet all the requirements of serious, non-speculative foreign capital.

Unfortunately, M&A operations are significantly restricted to famous players, the IT sector and startups. Many excellent middle market businesses simply do not reach the necessary level when it comes to corporate governance and accounting, fiscal, tax, labor and contractual compliance.

The “Brazilian way” of doing business is like a bucket of cold water for investors seeking opportunities in sectors historically pulverized by many middle market companies. Even with the complex environment, we have completed a number of M&A transactions on the sell-side and buy-side, showing that there are many good deals for companies that are doing the right planning

LG&P’s work in M&A stands out in the following areas:

• Mergers;
• Acquisitions;
• Joint Ventures;
• Negotiations.