A CHILE/PERU CROSS-BORDER TRANSACTION STOOD OUT IN NOVEMBER ALONG WITH FINTECH SECTOR INCREASED ACTIVITY
BOTH THE CHILEAN AND COLOMBIAN MARKETS SHOWED SIGNS OF DYNAMISM AND STRONG ACTIVITY DURING NOVEMBER. IN CHILE, THE CROSS-BORDER SALE OF SOPROLE TO THE PERUVIAN COMPANY, GLORIA FOODS WAS THE MOST SIGNIFICANT. HOWEVER, A SERIES OF FINTECH FINANCING ROUNDS HAVE ALSO BEEN RELEVANT IN THE TECHNOLOGY SECTOR. IN COLOMBIA THERE WERE TRANSACTIONS IN THE TECHNOLOGY SECTOR AS WELL AS OTHER AREAS. IN PERU, THE OIL & GAS SECTOR SHOWED INCREASED ACTIVITY
Among the most important transactions announced in Chile during November was the acquisition of Soprole, a leading Chilean dairy products manufacturer, by Gloria Foods, a Peruvian conglomerate that mainly operates in the food sector in Latin America. Soprole increased its revenues by 31.3% since 2018, reaching ~US$ 767.7 million in 2021. The seller was New Zealand’s Fonterra, a global leader in the production and export of dairy products. Fonterra maintained control over the company through Inversiones Dairy Enterprises, with 99.85% of Soprole’s shares. The transaction amounted to ~US$ 640 million and considers the entire ownership of Inversiones Dairy Enterprises. Through this transaction, Gloria Foods expects to strengthen its presence in the region and continue positioning itself as one of the leaders in the industry. Gloria owns several dairy companies in the region such as Pil Andina (Bolivia), Suiza Dairy Corporation (Puerto Rico), Gloria Colombia and Gloria Argentina, among others. The transaction is still under review by the National Economic Prosecutor’s Office (FNE).
Considering the number of transactions, the tech industry was the most active in the region. A total of nine transactions took place in this sector, following modernization and globalization trends. In recent years, the willingness to invest in tech companies in the Andean markets has increased due to their emerging popularity and growth potential.
Among the transactions completed in Chile, capital increases by Destácame and Racional two fintech companies, have been particularly noteworthy. Destácame closed a Series B capital raising of US$ 10 million which was led by Santander Bank. This is the first time that a country’s largest bank invests in a Chilean fintech. Destácame offers various financial products and services. Specifically, they generate information that enables access to bank loans. The operation also involved other well-known players in the fintech ecosystem, such as Kayyak Ventures and FEN Ventures, together with local family offices.
In addition, Racional, a mobile app that provides financial services based on the risk profile of each person, raised US$ 2 million. With this capital increase, the company incorporated two venture capital firms as shareholders: Genesis Ventures and Amarena. Racional seeks to expand into the Brazilian and Colombian markets, where it hopes to consolidate its position.
In Colombia during November, Medicana, a subsidiary of Software Effective Solutions Corporation, acquired a majority stake in Eko2o Enviromental Solutions, a company focused on infrastructure development. Medicana is a U.S. firm that specializes in producing pharmaceutical cannabis. Eko20’s core business is the construction of greenhouses and irrigation systems in Colombia and South America. Medicana’s aim is to develop its operations in Latin America, with an initial focus in Colombia through partnerships with laboratories, research centers, hospitals and private clinics. Through this acquisition, Medicana will be able to enhance its growth plan and expand its infrastructure and business in search of new opportunities in new markets.
Another important transaction that took place in Colombia during November was the financing round carried out by Muncher, a Colombian dark kitchens provider. The company raised US$27.4 million in its series B financing round. The main investor was Glisco Partners, followed by Femsa Ventures and TMT Investments. Muncher was founded in 2019, and since then they have managed to open 400 food stores across Colombia, Mexico, Peru and Brazil. The capital raised will be mainly allocated to the expansion of new modular dark kitchens, in addition to strengthening and boosting new technologies for the company’s digital sales.
On the other hand, a transaction completed in Colombia during the month was the financing round carried out by Trii Grupo TT. This is a Colombian venture that operates in the fintech sector and offers several alternatives for investing in capital markets around the world. In addition, the company has developed an app to invest in the most important companies in Colombia, as well as other selected international public companies. Trii has more than 150,000 users in Colombia, Peru and Chile, and has achieved a remarkable growth since its IPO in March 2020, growing its net sales by nearly 400% this year. The company raised a total of US$ 3 million and Bancolombia Ventures was the main investor.
M&A transactions in Peru during November showed less activity than Chile and Colombia. Among the completed transactions were the purchase of Limagas Natural Movilidad by HAM Criogenica Peru, a subsidiary of the Spanish group HAM, and Lima Gas, a subsidiary of the Chilean company Empresas Lipigas. These two companies acquired 100% of Limagas Natural Movilidad (60% by Lima Gas and 40% by HAM Criogenica). Both companies made this acquisition as part of their strategic regional expansion plans. They also seek to take advantage of the Peruvian market potential related to the use of natural gas in private cars. Grupo HAM aims to become a leader in the energy industry in Latin America. As a consequence, its growth plan is to continue investing over the next few years in the development of the first Peruvian liquid natural gas refueling stations. In this way, the Company would be able to meet the demand of light vehicles and long haul trucks. Empresas Lipigas aims to strengthen its role in the Peruvian market, taking advantage of the use of Peruvian natural gas benefits that were granted by the latest governments.
In November, the most outstanding transaction in Chile was the acquisition of Soprole by Gloria Foods, the Peruvian food conglomerate. Also, several capital raising rounds were held by fintech companies, demonstrating that this sector is being very active in the Chilean M&A market. Colombia saw transactions in various industries during November. However, the most active one was also the tech sector. Lastly, investments in the Oil & Gas sector were notable in Peru.
Finally, it is worth noting that, although the M&A markets continue with an intense activity, economic recessions can be expected for 2023. The role of the Andean governments in the coming months will be vital in order to continue stimulating economic activity.