Brazil closes July with growth of 17% in the volume of mergers and acquisitions

49 transactions were registered, according to a report by PwC Brasil July recorded a 17% increase in the volume of mergers and acquisitions in the country compared to July last year. During the period, 49 transactions were announced, according to PwC Brasil’s monthly report. In the first seven months, there were 349 transactions, an increase of 6% when compared to the same period of the previous year. The Southeast continues to be predominant in the interests of the investor, with 72% of the business announced between January and July, 250 transactions, while in the same period of 2016 were registered 200 mergers and acquisitions. In July, there were 37 transactions in the Southeast, an increase of 106% over the same month of the previous year. The state of São Paulo leads the ranking with 56% of transactions between January and July, totaling 195 negotiations. In 2016, there were 155. Of the total of 195 transactions, 156 were registered in the capital of São Paulo and 39 in the interior of the state.

Predominant sectors

Information Technology (IT) continues to be the sector that most attracts investors, accounting for 21% of the total volume of the first seven months, with 74 transactions, a 16% increase over the same period of 2016. Among the business examples announced in July in the area of ​​IT, the acquisition of Brazilian company Bysoft by Wise Tech Global, an Australian company that provides software for logistic execution industry, stands out. The Auxiliary Services sector ranked second in the volume of operations from January to July, with 11% of the total, equivalent to 37 mergers and acquisitions (up 6% compared to the previous year). Third, Public Services registered 7% of the total, with 26 transactions, representing a 160% increase over last year.

Origin of investments Investments of national origin were ahead of foreign investments, with a 57% participation in the transactions announced until July 2017, or 185 negotiations, which represent a 15% increase when compared to the same period of 2016.

In the same period, 144 transactions involving foreign capital were announced, a reduction of 2% compared to the same period of the previous year. In July, 24 transactions were carried out by foreign investment, a 50% growth in relation to the volume transacted in the same period of 2016. The United States accounted for 27% of the total volume of transactions, leading the ranking with 39 negotiations, a reduction of 24% when compared to the previous year. In the first seven months of the year, majority control acquisitions surpassed the 2016 volume by 6%, totaling 202 transactions, the modality with the highest turnover.

Private Equity

In the first seven months of 2017, financial investors were present in 88 negotiations, up 38% compared to the same period in 2016, with 58% of domestic investors (51 transactions) and 42% of foreign investors (37 transactions). In July, there were six deals, a reduction of 25% over the same period last year, with 50% of domestic investors (three transactions) and 50% of foreign investors (three transactions). Of the eight transactions with financial investors announced in July 2016, 63% had been made by domestic investors and 37% by foreign investors.

Source: PWC