Hypermarcas raises nearly US$ 400 million with IPO
O Estado de S. Paulo - 04/17/2008
The company of consumption products Hypermarcas reopened the market of IPOs (initial public offer of shares) in the São Paulo Stock Exchange. The company could raise nearly R$ 700 million (US$ 400 million) in its offer. On Friday, the company shall debut in the New Stock Exchange, under the code of HYPE3. The market was practically paralised because of the international financial crises. This year 17 companies have given up making offers of shares. Another 11 companies asked CVM to temporarily suspend their offers. When Hypermarcas went into the market, many financial analysts doubted that it could finish its IPO. The offers made by Hypermarcas and by the Le Lis Blanc brand - still in process - are seen as 2008's greatest market test. The result of the offer indicates two tendencies. First, there are still opportunities for large companies with good cash generation. Controled by Arisco's former owner, João Alves de Queiroz Filho, Hypermarcas has several fast circulation consumption products. It owns brands of hygiene and cleaning products, and food, medicine and personal care items, such as Assolan, Etti, Doril, Monange and Engov. The company sells R$ 2 billion (US$ 1.14 billion) per year. It is estimated that its market value is R$ 3 billion (US$ 1.71 billion). Second, the offer reveals that even for powerful companies the market conditions continue difficult. In the beginning of the process, Hypermarcas' expectation was to obtain the price of R$ 22 (US$ 12.6) per share. The final value was around R$ 17 (US$ 9.7). If it had gotten the initial price, Hypermarcas would raised R$ 769.3 million (US$ 439.6 million), or R$ 70 million (US$ 40 million) more than now. The purchase of companies and brands will be Hypermarcas' main object with its offer of shares. According to the preliminary prospect about the operation, the company intends to apply 60% of the funds raised in the primary emission of papers in this strategy of expansion. The other 40% will be destinated to marketing and product launching.