Alpargatas Weighs International Acquisitions to Boost Growth
Alpargatas SA (ALPA4), the Brazilian maker of Havaianas flip-flops, is weighing acquisitions overseas as an opportunity to boost growth, Chief Executive Officer Marcio Utsch said.
“We are looking at some M&A deals,” Utsch said in an interview at Bloomberg’s Sao Paulo offices yesterday.
Utsch, 52, said Alpargatas wants to become a global brand in footwear, clothing and related businesses. “These are the sectors we are focusing our research on,” he said.
Alpargatas had 683.6 million reais ($397 million) of cash on hand as of Sept. 30, according to the latest quarterly earnings statement. That’s the biggest amount since at least 1999, according to data compiled by Bloomberg. The Sao Paulo- based company’s last acquisition was Cia. Brasileira de Sandalias, maker of Dupe flip-flops, in 2007. Alpargatas increased its stake in Alpargatas Argentina SA the same year and currently holds 92 percent of that company, Utsch said.
Exports, pre-World Cup sports events, rising incomes in Brazil and increased capacity from a new plant will help Alpargatas grow faster this year than in 2011, Utsch said. Alpargatas plans to add 2,250 workers this year, a 13 percent increase to its workforce, he said.
The stock has gained 15 percent this year through yesterday. The BM&FBovespa Small Cap index has risen 12 percent over the same period, while shoe-maker Arezzo Industria e Comercio SA surged 23 percent in the period. Alpargatas shares were unchanged at 14.20 reais at today’s close.
Alpargatas may seek to buy strong brands in Brazil or overseas, said Ricardo Boiati, an analyst who covers the company at Banco Bradesco BBI SA.
“Alpargatas is a manager of brands, not just a footwear maker,” said Boiati, who has an “outperform” recommendation on the stock.
Alpargatas will sell to new markets in Asia this year and seek to boost market share in established markets, including the U.K. and the U.S., he said.
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