Brazil’s IPO Drought Set to End as Linx Plans Offering

Brazilian technology company Linx SA and its investors plan to sell shares worth as much as 459 million reais ($225 million) next month, in an initial public offering that would be the country’s first in nine months.

Linx, which is based in Sao Paulo and provides communications technology and makes management software for retailers, said today in a prospectus on its website that the shares will be priced on Feb. 6, and trading will start Feb. 8. The company will issue as many as 11.05 million new voting shares, while investors including Brazil’s development bank BNDES will sell as many as 5.95 million voting shares, according to the prospectus.

The IPO would be the first on the country’s BM&FBovespa exchange since furniture-maker Unicasa Industria de Moveis SA raised 425.6 million reais in a share sale in April. Exchange Chief Executive Officer Edemir Pinto has said he expects 2013 to bring an increase from the three IPOs held in 2012. There were 27 offerings in the three previous years.

“There’s definitely opportunities for more companies to access capital markets in Brazil,” Audrey Kaplan, who helps manage the $540 million Federated InterContinental Fund, said in a phone interview from New York. Brazil has a small number of public companies for an economy of its size, she said.

Postponed Offerings

Six Brazilian companies withdrew or postponed IPOs last year, data compiled by Bloomberg show, as Latin America’s largest economy struggled to boost its recovery. Gross domestic product probably expanded 1 percent in 2012, about half the pace of the U.S. and Japan, according to economists surveyed by Bloomberg.

Linx said in the prospectus it expects the shares to price in a range of 23 reais to 27 reais. The country had announced plans for the IPO in a regulatory filing in December.

Credit Suisse Group AG, Morgan Stanley, Banco BTG Pactual SA and Banco Itau BBA are underwriting the share sale. The stock will be listed in Bovespa’s Novo Mercado section, in which only voting shares may trade and at least 25 percent of a company’s stock must be available for trading.