With volumes in the capital markets subdued in 2023, there was increased client interest in private markets and M&A transactions. BofA Securities – led by Augusto Urmeneta, president of Bank of America for Latin America and head of Latin America global corporate and investment banking – embraced this challenge and helped clients tap alternative sources of liquidity. M&A was an important strategic option for many companies and BofA’s deal list featured 26 clients in five countries with both cross-border and domestic transactions, which accounted for a 9.5% market share in terms of fee revenues ($52.2 million).
In Brazil – the largest and most important market in Latin America – BofA faces very strong local competition, but the firm used its international network to win some important mandates. It was exclusive financial adviser to Natura & Co in its sale of Aesop to L’Oréal – one of the highest profile M&A transactions of the year. The deal helped Natura to de-lever and strengthen its balance sheet, and BofA led the client’s assessment of its strategic priorities, most notably its integration of Avon in Latin America, which further optimized that company’s international footprint, and the continued improvement of the Body Shop.
In Chile, BofA was exclusive financial adviser to Southern Cross Group in its sale of Esmax Distribucion to Aramco. The deal represented an important development for the Saudi oil company’s international expansion in its distribution business – its first in Latin America – with BofA leading on sensitive pricing discussions for Esmax, which has over 100 years of operation in the country.
In Mexico, BofA was exclusive financial adviser to Promocion y Operacion (Prosa) in the sale of a majority stake to Visa International Service Association. Prosa’s shareholders include some of the largest banks in Mexico (Banorte, HSBC Mexico, Santander Mexico, Scotiabank Mexico and Banjercito) and, as such, the mandate speaks to BofA’s market reputation.
The same rationale – being the adviser of choice on critical transactions for the region’s financial institutions – also applies to BofA’s role as lead left global coordinator for the equity follow-on for Banco de Credito e Inversiones (Bci). The capital raise was 100% primary and the proceeds will be used to support the bank’s international growth strategy and to boost its capital ratios to comply with Basel III requirements.
BofA Securities was exclusive financial adviser to Natura & Co in its sale of Aesop to L’Oréal – one of the highest profile M&A transactions of the year
BofA was able to achieve a 94.6% subscription resulting in a de-minimis rump of $35 million, which was then placed via an auction of nine local blocks, with the deal closing at a 7.5% discount, compared to a US average for marketed follow-ons of 10.2%. Bci was the largest such transaction in Latin America (outside Brazil) and the largest for a financial institution in Latin America during 2023.
BofA advised XP in its tapping of private equity markets and was mandated to be the sole bookrunner on three out of four of the Brazilian financial institution’s block trades. One of the deals – a $229 million trade – was the largest such private sale of a Latin American company since April 2022 and BofA generated huge demand with a book full of high-quality investors. It managed to keep the momentum sustained through subsequent deals for $80 million and $186 million.
Repeat business was also evident in BofA’s mandate to be joint global coordinator for the IPO and subsequent follow-on for Mexican real estate developer Vesta. The $446 million IPO, in June 2023, generated more than $1.3 billion in demand from more than 75 accounts and was the largest IPO of a Mexican company in the US since 2013 and the first Mexican real estate company listing in the US. The successful execution of the IPO enabled the company to go back to the markets to sell a follow-on in December of 2023, with the stock trading up by 1.1% during the marketing period, which outperformed the average in 2023 by 374 basis points.
