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Home > Services > Sell side advisory - PE/VC

Raising of Capital Through Private Equite

Private Equity and Venture Capital investments can be attractive alternatives for financing expansion projects for medium sized companies, especially those that have little or no financial history and/or assets that can be offered as security for bank financing. This alternative has been available in Brazil since the 1980s and in the 1990s experienced important growth with the entry of international funds.

Typically, Private Equity funds seek to invest in medium sized companies with increased growth potential, resulting in strategic and operational changes in concert with current company managers, by taking significant minority stakes, aimed at company growth and valuation, with subsequent sale of shareholdings, in order to capitalize on the value added during the investment period.

With stable currency, increased revenue and expansion of credit, Brazil became one of the most attractive global economies. Furthermore, the adoption of internationally recognized governance practices by Brazilian companies served to stimulate capital markets, resulting in an important reduction in the risks associated with private equity divestitures.

Investment may take various forms:

• Acquisition of company quotas;
• Acquisition or subscription of quotas or ordinary or preferred shares;
• Subscription of debentures convertible into shares;
• Subscription or acquisition of options in complex purchase and sale structures;
• Subscription bonds;

The form of participation by Private Equity companies is, therefore, defined according to the entry strategy in a determined market, adaptation to the shareholder investment flow and other variables which define the most advisable form of investment.

In this respect, Borse Investments advises its clients from definition of objectives and structuring of investment projects to raising of capital and project execution.