Advent Has $2 Billion for ‘Niche’ Retail Acquisitions in Brazil

Advent International Corp., a private-equity company, has $2 billion to make acquisitions in Brazil’s retail industry and take advantage of growth in Latin America’s largest economy, the company’s local head said.

“We’re looking at various companies in niche retail areas,” Patrice Etlin, managing partner at Advent in Latin America, said in a telephone interview from Sao Paulo yesterday. Food and household-appliance retailers have gone through a period of mergers and acquisitions, whereas there is still space in specialist retail, including pharmacies and construction materials, he said.

Brazilian retail sales, including cars and building materials, grew 17 percent in the 12 months to November. Gross domestic product will expand by 4.6 percent this year, according to a central bank survey taken Jan. 28. Advent, based in Boston, has invested in Brazil since the 1990s, in companies including duty-free shop operator Dufry Group and clearinghouse Cetip SA - Balcao Organizado de Ativos & Derivativos.

Growth in consumer spending is what most attracts Advent to Brazilian retail, Etlin said. He said the level of expansion more than compensates for an increase in asset prices due to rising competition from investors and private-equity funds.

“Valuations have risen,” said Etlin. “The growth counterbalances the higher price demanded for assets. We’re chasing higher growth, so we can justify a higher entry price.”

Advent expects to invest in Brazil this year, Etlin said, declining to give a time line.

To contact the reporter on this story: Joao Oliveira in Sao Paulo at joliveira4@bloomberg.net

To contact the editor responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net

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