Exclusive - Spain's Puig in talks to buy stake in Brazil's Granado: sources
Reuters
Published Jul 14, 2016 19:09
Updated Jul 14, 2016 19:21
Exclusive - Spain's Puig in talks to buy stake in Brazil's Granado: sources
By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO (Reuters) - Spanish fashion and fragrance firm Puig SA is in advanced talks to buy a minority stake in Grupo Granado SA, a Brazilian manufacturer and retailer of high-end beauty care goods that wants to pursue global expansion, four sources with knowledge of the matter said.
Barcelona-based Puig, the owner of the Carolina Herrera and Jean Paul Gaultier brands, could pay about 1 billion reais ($306 million) for a stake of up to 30 percent in Granado, said the first two sources, who asked for anonymity because talks remain private.
Former banker Christopher Freeman, who bought Granado from the company's namesake founding family in 1994, wants a partner to help the Rio de Janeiro-based company bolster an overseas push that began three years ago with the opening of a small shop in Paris, a third source told Reuters.
Both parties are working to announce a deal within days, all the sources said. They said Puig has consistently stood out over a number of private-equity firms and strategic rivals that showed preliminary interest in Granado. Freeman began to look out for a minority partner at the beginning of the year, the sources said.
Media representatives for Puig did not respond to a an emailed request for comment. Granado's investor relations division declined to comment.
The Granado stake could help Puig grow in Brazil, a country of 200 million that ranks as the world's No. 3 cosmetics and beauty care market. A third-generation family-owned business, Puig manages licenses such as Prada and Valentino and markets celebrity fragrances in over 150 countries.
Founded in 1870 by Portuguese pharmacist José Antônio Coxito Granado, Granado has managed to dribble the impact of Brazil's harshest recession in eight decades by targeting sales of the company's glycerin soaps, shave balms, creams, nail polish and body powders to an affluent clientele.
FATHER AND DAUGHTER
Granado, which had revenue of 380 million reais last year, has achieved compounded average growth of 20 percent over the past decade, according to the third source.
Freeman and Granado hired the investment-banking units of Itaú Unibanco Holding SA (SA:ITUB4) and Grupo BTG (LON:BTG) Pactual SA (SA:BBTG11) to advise them on the transaction, the sources said. The banks did not comment.
A former Citigroup Inc (NYSE:C) investment banker, Freeman and his daughter Sissi Freeman have spent the past decade honing the company's business focus and retro image, represented by vintage logo designs and old-styled store decoration mimicking early 20th century pharmacies.
Get The App
Granado's three divisions run a web of 47 stores across Brazil, a distribution network and a plant where the company's flagship products are manufactured. Granado's most recognised products include Phebo, Brazil's first luxury perfumery and glycerin soap brand, which Freeman bought in 2004.
On its part, Puig's presence in emerging markets has grown, helping the company decouple from years of weak growth in Spain. Currently, 47 percent of revenues come from emerging market countries outside of the European Union and North America.
Last year, Puig had net income of 126 million euros ($140 million) on revenue of 1.645 billion euros. Puig expects annual revenue to reach 2 billion euros by the end of next year.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.