Goldman, ADIA Said to Weigh Joining Gavea in Snagged Fleury DealCristiane Lucchesi, Jonathan Levin and Dinesh Nair
Goldman Sachs Group Inc.’s private-equity arm and Abu Dhabi Investment Authority are considering joining Gavea Investimentos Ltda. in a bid for Brazilian medical-services company Fleury SA, people with knowledge of the matter said.
In joining Gavea, the two investors would be wading into a bid for a company that has been on the market for more than six months. Fleury, which has a market value of about 2.6 billion reais ($1.2 billion), said in March that it was in exclusive talks with Gavea.
The deal has been held up, as Gavea’s partners in Instituto Hermes Pardini Ltda. -- a closely held medical lab company that would be merged with Fleury -- have sought a greater role in the combined company, three people said, asking not to be identified discussing private information. It’s still possible that a deal won’t be reached, the people said.
Rising incomes in Latin America’s most populous country mean more people are leaving the public health system in favor of private care. That’s prompting investors to seek ways to profit from the growing pool of health-care consumers, spurring deals including the takeover of Amil Participacoes SA by UnitedHealth Group Inc. last year.
Spokesmen for Fleury, Gavea, Goldman Sachs, ADIA and Hermes Pardini declined to comment. Gavea, JPMorgan Chase & Co.’s Brazil private-equity and hedge-fund unit, owns a 30 percent stake in Hermes Pardini.
Shares of Sao Paulo-based Fleury have retreated 10 percent this year as the deal has dragged on. Amid the negotiations, Fleury also posted a net loss in the fourth quarter and missed sales estimates, further dragging on the stock.
The Pardini family, which controls Hermes Pardini, wants a higher valuation for their company and a greater role in running the combined business, the people said. Aurea Pardini, a member of the family, recently retained financial adviser Greenhill & Co., while other Pardinis are working with Moelis & Co. to negotiate those points, the person said.
The family stake at Hermes Pardini could be valued at 1.5 billion reais, one person said.
Banco Itau BBA SA is lining up a four-bank syndicated loan for Gavea, Goldman and ADIA, one person said. JPMorgan Chase & Co. is advising Core Participações SA, the holding company that controls Fleury. Any acquirer of Fleury would have to make an offer to buy out the minority shareholders’ stakes at the same price paid to the controlling stakeholders.
Spokesmen for Itau, Greenhill, and Moelis declined to comment. Exame earlier reported that the Pardini family is holding up the deal.