Hypermarcas Jumps Most Since June After Buying Mabesa to Expand in Diapers

Hypermarcas SA, the Brazilian maker of consumer products, rose the most in almost two months after announcing the acquisition of Mabesa do Brasil Ltda. to become the largest children’s diaper producer in the country.

The shares jumped 3.6 percent to 23.05 reais at 12:53 p.m. New York time in São Paulo trading. Earlier, they rose as much as 4.7 percent, the highest intraday gain since June 15. Hypermarcas is up 15 percent this year, compared with a 0.9 percent drop in Brazil’s benchmark Bovespa index.

With the 350 million reais ($199.7 million) acquisition of Mabesa, Hypermarcas will hold 26 percent of the children’s diaper market in Brazil, according to the statement e-mailed by the company yesterday. Mabesa produces children and adult diapers and feminine pads for brands that include Cremer-Disney and Plim Plim.

“Hypermarcas continues to deliver on its M&A plan,” UBS Investment Research analysts including Marimar Torreblanca said in a research note today.

The company’s cash position, with 1.6 billion reais of cash, following a secondary share offering in April and debenture issuance in July, provides Hypermarcas with the liquidity to make further acquisitions and increase growth, BTG Pactual said in a report today.

“We expect this solid financial position to lead to another season of acquisitions, which should translate into additional upside to our growth estimate,” BTG Pactual said. The firm rates the stock “buy.”

Hypermarcas reported yesterday second-quarter net income fell 60 percent to 53.3 million reais. The results missed the 81.5 million reais mean estimate of four analysts in a Bloomberg survey.

Profit was pressured by “higher marketing and financing expenses,” Torreblanca of UBS wrote.

To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net

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