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3i clinches first deal in Brazil

20 Dec 2011

London-based private equity firm 3i has agreed to buy a minority stake in Blue Interactive Group, a Brazilian cable TV and broadband provider for R$100m ($55m), marking its inaugural deal in Brazil.

Blue was formed in 2009 as an acquisition platform in the rapidly-growing pay TV and broadband markets. Since then, the company has bought majority stakes in cable TV companies, becoming the largest independent cable provider in Brazil with operations in 14 cities and 9 Brazilian states. From 2009 to 2011, both Blue’s subscriber base and margins have more than doubled.

Besides expanding its offering into other cities, (including mid-sized cities where cable has not traditionally been available in the past), Blue is also looking to introduce innovative products and services for its customers such as ‘Over the top’ which enables subscribers to access a library of downloadable films and ‘Iris’, which enables subscribers to monitor cameras in their business or home remotely.

Marcelo Di Lorenzo, a partner, managing director and head of 3i Brazil, said, “Blue has performed well in recent years. The Brazilian cable TV and broadband market is undergoing significant change and we feel that Blue is well placed to take advantage of this new environment and further expand its offering across the country. We look forward to working with the management team to continue the company’s growth, both organically and by acquisition.”

Both the cable TV and broadband markets have been growing at attractive rates in recent years, posting annual average growth rates of 19 per cent and 34 per cent respectively between 2005 and 2010. These markets are expected to continue to show strong growth over the next five years. Factors behind this continued growth include low penetration levels in Brazil compared to other markets, regulatory changes which enable greenfield opportunities to be pursued in mid-size cities where cable TV is not currently available and a growing, affluent middle class.

The deal follows news in April that the firm had opened a new office in Brazil, drafting in Standard Bank Private Equity professionals Marcelo Di Lorenzo, Edward Hanmer, Felipe Vivacqua and Carlos Lopes to run the new branch.

The team is to focus on the consumer and business services sectors, and will look to invest between $30m and $100m for majority or minority stakes in businesses with an enterprise value of up to $200m. Around 20 per cent of 3i’s portfolio companies generate a portion of their revenues from Latin America.

Copyright © 2011 AltAssets

 

 

 

3i makes first foray into Brazil

 

London-based private equity firm 3i has agreed to buy a minority stake in Blue Interactive Group, a Brazilian cable TV and broadband provider for R$100m ($55m), marking its first deal in the Brazilian market.

 

Blue was formed in 2009 as an acquisition platform in the rapidly-growing pay TV and broadband markets. Since then, the company has bought majority stakes in cable TV companies, becoming the largest independent cable provider in Brazil with operations in 14 cities and 9 Brazilian states. From 2009 to 2011, both Blue’s subscriber base and margins have more than doubled.

 

Besides expanding its offering into other cities, (including mid-sized cities where cable has not traditionally been available in the past), Blue is also looking to introduce innovative products and services for its customers such as ‘Over the top’ which enables subscribers to access a library of downloadable films and ‘Iris’, which enables subscribers to monitor cameras in their business or home remotely.

 

Marcelo Di Lorenzo, a partner, managing director and head of 3i Brazil, said, “Blue has performed well in recent years. The Brazilian cable TV and broadband market is undergoing significant change and we feel that Blue is well placed to take advantage of this new environment and further expand its offering across the country. We look forward to working with the management team to continue the company’s growth, both organically and by acquisition.” 

 

Both the cable TV and broadband markets have been growing at attractive rates in recent years, posting annual average growth rates of 19 per cent and 34 per cent respectively between 2005 and 2010.  These markets are expected to continue to show strong growth over the next five years. Factors behind this continued growth include low penetration levels in Brazil compared to other markets, regulatory changes which enable greenfield opportunities to be pursued in mid-size cities where cable TV is not currently available and a growing, affluent middle class. 

The deal follows news in April that the firm had opened a new office in Brazil, drafting in Standard Bank Private Equity professionals Marcelo Di Lorenzo, Edward Hanmer, Felipe Vivacqua and Carlos Lopes to run the new branch.

The team is to focus on the consumer and business services sectors, and will look to invest between $30m and $100m for majority or minority stakes in businesses with an enterprise value of up to $200m. Around 20 per cent of 3i’s portfolio companies generate a portion of their revenues from Latin America.

Copyright © 2011 AltAssets

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