Although there has been a decrease in the number of transactions, it is possible to observe that some sectors such as energy, technology, and mining remain resilient to M&A activity.

Among the completed transactions in Chile during September, it is worth to mention the purchase of the María Elena solar plant by Weg-4, a local fund manager, from SunEdison Chile, a company controlled by Atlas Renewable Energy since 2017. US$22 million were paid for the shares of the photovoltaic plant, which is located in the district of Antofagasta, in northern Chile. The plant has an installed capacity of 72 MW distributed over 189 hectares, consists of more than 240,000 modules that generate more than 201 GWh of electricity and supply enough clean energy for around 10,000 households. This is not the first investment made by Weg-4 in the industry, but the third, as it had already acquired the San Pedro III photovoltaic plant in 2020, with an installed capacity of 58 MW, and another plant in 2021 with an installed capacity of 40 MW. Through this purchase, the local fund will total a portfolio of 170 MW, which represents 2.5% of the total installed capacity in solar energy in Chile. On the selling side, SunEdison Chile went bankrupt in 2016, which made way for Atlas Renewable Energy, controlled by Actis, to acquire more than 1,500 MW of SunEdison’s portfolio in 2017.

Another relevant transaction is the acquisition of NLT Secure by Cerberus Cyber Sentinel Corporation. NLT Secure is a company that offers a wide range of security solutions and services for organizations in South America. The acquiring company, Cerberus Sentinel, is a North American leader in the cybersecurity and compliance industry, which has shown previous interest in the region as this is not their first transaction in Chile. One month ago, the Company acquired Servicios Informaticos CUATROi, a managed services provider & cybersecurity company with headquarters in Santiago and with offices in Colombia and Peru. These transactions are expected to accelerate Cerberus Sentinel’s growth in Latin America.

During September, another completed transaction in the mining industry was the acquisition of a 1% Net Smelter Returns Royalty (NSR) on the Proyecto Marimaca copper, by Osisko Gold for almost US$ 16 million. Osisko Gold, is a Canadian Company that owns royalties of mines of various metals, mainly gold, silver and diamonds. The selling company, Marimaca Copper, is also a Canadian Company, but it is mainly engaged in the exploration and development of copper projects. The newly acquired royalty by Osisko covers approximately 1,310 hectares of existing and prospective resources and has been granted rights of first refusal with respect to any royalty stream or any interest in financing the project.

Among the transactions announced in September was the purchase of Blue Express, a last-mile logistics company, by Copec and Complemento Filiales, for US$ 230 million. Blue Express provides logistics services for e-commerce and couriers through 1,000 reception and dispatch points throughout Chile. Copec is one of the leading companies in Chile in the marketing, storage and distribution of fuels, with more than 600 service stations throughout the country. Through this transaction, Blue Express expects to expand its services, become more efficient and sustainable, and gain access to Copec’s extensive distribution network. The transaction is currently subject to the approval of the National Economic Prosecutor’s Office (FNE).

The second announced transaction is the purchase of a non-controlling interest of NIU Foods by Inversiones Gran Araucaria Dos (IGA Dos). NIU Foods is a gastronomic holding that groups several brands in this industry, NIU Sushi being the most renowned one. IGA Dos is a company linked to the Ibáñez Atkinson Family, which owns interests in several companies in Chile and abroad. Through this acquisition, IGA Dos seeks to support the restaurant chain to execute its growth plans, locally and internationally. This transaction is also subject to the to the approval of the FNE.

M&A transactions during the month of September were not very active in Peru, showing a cooling of M&A activity compared to the previous months. One relevant transaction announced was Newrange Gold’s purchase of 100% of two Peruvian subsidiaries of Great Panther for US$750,000, which include Great Panther Silver Peru and Great Panther Coricancha. The current owner of the assets, Great Panther Mining, is a mining company based in Vancouver, Canada with mining investments in Peru. The Coricancha mine is located in the central Andes of Peru and has extensive land holdings in the countries’ prolific Central Polymetallic Belt. The asset includes a 600 tons per day operating mill, an underground mine and supporting infrastructure. This acquisition will provide a renewed focus on exploration, development and mine production for the shareholders of Newrange Gold, a Canadian-based mining company specialized in precious metals exploration.

In Colombia, there was a fintech operation in which PayU acquired Tecnipago, also known as Ding, which operates electronic deposits and payments platform. PayU is a financial platform that offers various types of services such as online payments, anti-fraud services and free courses in digital marketing, entrepreneurship, and e-commerce. PayU has more than 400 local payment methods, it has presence in 50 markets worldwide and carries out 10 million transactions on a daily basis. This acquisition is aligned with the Company’s overall vision towards the Fintech ecosystem in Colombia, given that PayU has been undergoing the process of evolution of online payments in Colombia, and now seeks to expand its services to the inclusion of small and medium-sized enterprises in the country.

Additionally, in Colombia, an important announcement was issued regarding the transfer of Grupo Éxito shares. Companhia Brasileira de Distribuição (GPA), controller of 97% of Grupo Éxito, approved the distribution of 83% of the company’s capital to 50,000 GPA’s shareholders, who, after the distribution, will become direct owners of Grupo Éxito. This project will significantly expand Grupo Éxito’s shareholder base and increase the share’s liquidity, since after this transaction more than half of the shares will be remain in free circulation in the market (compared to merely 3% today). Among the 50,000 shareholders who will receive Grupo Éxito’s shares, the French group Casino stands out, which is currently the largest shareholder of GPA.

M&A transactions recorded a slight decline in the month of September, although some industries such as energy, technology and mining remain resilient. This is mainly due to the higher probability that some economies will enter technical recessions at the end of 2022 or early 2023, as would be the case of the United States, Chile and Colombia, which will impact companies’ investment decisions. These situations would be occurring due to external factors, such as the strong contractionary monetary policy of the U.S. Federal Reserve, the fall in commodity prices and the persistence of inflation worldwide. However, there is still optimism in the sector as when economic activity slow down, many companies look for opportunities to diversify their portfolios, while others look for alternatives to develop exit plans. Therefore, although a downward trend in M&A transactions could begin, there are still companies that are looking at this period with optimism.

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