Next week, the American market will reach the 200 new companies that went public on the stock exchanges there in 2024 – the volume of IPOs in the United States until the end of November is 30% higher than that recorded last year. One of these 200 is Brazil Potashbased in Canada and which will explore a potash mine in Amazonas. The company debuts today (21) on the New York Stock Exchange.
Abundance there, scarcity here. In 2024 we had zero IPO in Brazil. In 2023? Zero. And 2022? Guess what? Zero also.
With the drought of IPOs in Brazil and no prospect of market improvement on the horizon, Brazilian companies that had prepared to raise funds on the local stock market reached the waiting limit. And they are changing their plans. Some are increasing their debt. Others carry out private share sale operations. For those that meet certain requirements, one of the paths studied is the American stock market, where, as can be seen, investor appetite remains quite strong.
Compassgas and energy arm of Cosane Votorantim Cimentos have been waiting for a few years for the best moment to go public in Brazil and are seen by experts consulted by InvestNews as two strong candidates for listing in the United States. THE Votorantim Cimentos denies that it is preparing to launch an IPO on the US stock exchange, but sources linked to investment banks say that the company monitors the market carefully.
Both meet the main criteria for listing in the United States: size. The thing is, in the American market, offers are usually greater than in Brazil. This year, the average volume of offers was US$380 million, equivalent to R$1.2 billion. In other words, the company needs to have a much higher market value than that to get there. Especially because making a share offering on a United States stock exchange is more expensive. And the call liability – regulatory requirements – are stricter than in Brazil.
READ MORE: Votorantim evaluates IPO of unit in North America, sources say
Both Votorantim Cimentos and Compass have the support for this. The issue, experts say, is that the two companies are considered the “crown jewels” of their conglomerates.
This means your controllers will be very picky about price – or valuation – for the sale of these shares. Therefore, controllers tend to be very strict in their decision: they will only go to market when they are sure they have found the best moment. Especially in the case of Compass, from Rubens Ometto’s Cosan, after the IPO (in the USA) of another company in the group, Mooveof lubricants, failed at the beginning of last month.
Compass has an added incentive to make the move toward the U.S. stock market. After a few months of trying, unsuccessfully, to do an IPO on B3the company opted in September for a private operation to sell a stake in the capital to a group led by Bradesco Seguros. It was possible to raise R$1.44 billion – the company had already carried out another private operation worth R$810 million in May this year.
The inflow of R$2.25 billion gave impetus to Cosan’s energy company. But both operations have a fixed term and, at some point, it will be necessary to provide an exit for investors.
American appetite
What experts say is that, at this moment in the American market, there is an appetite for companies coming from other markets, even if they do not have revenue in hard currency. “There is a huge demand for small caps (companies with lower market value), from different sectors, not just technology”, says Ricardo Lacerda, CEO of BR Partners.
So far, the Brazilian companies that launched themselves in the American market had the common characteristic of having a strong appeal to investors in the technology sector – as in the case of Embraer or the Nubankfor example – or have globalized activity – in the case of Gerdau. “Now, what we see is a very good window for companies in the industrial sector, even those that do not have relevant direct operations in the American market”, says Teodora Barone, head de equity capital markets do UBS BB.
Although there are many arguments in favor, being the company to put its foot in the water to test the market temperature is always more challenging. That’s what the Moovea Cosan company, tried to do it. But experts say that the lubricant manufacturer’s negative experience had more to do with a wrong strategy in setting the asset’s price than with market conditions. And they argue that there is room for one of them to make this move.
READ MORE: Fundraising of companies in the capital market breaks record in July
Meanwhile, other paths have been adopted. After hiring banks in January to carry out its IPO, the Oceanica company that offers solutions for underwater oil and gas exploration, debuted in the bonds and issued US$375 million in debt securities with a five-year term on the international market in August. With the IPO, the company intended to raise R$1 billion.
I and BRK Environmentalanother candidate for a primary share offering, put some assets up for sale, including some concessions in the State of São Paulo and Cachoeiro (ES). (Collaborated by Raquel Balarin)
