Acquisition opportunities attract French Truffle
Valor Econômico
Truffle Capital, a financial institution headquartered in Paris, which invests primarily in the corporate market, evaluates the acquisition of companies in Brazil and the structuring of an investment fund focused on the country. To look for such opportunities, Bernard-Louis Roques, investing partner of Truffle Capital, visited Brazil last week, for the third time. "We're fascinated by the growth potential of the Brazilian market of information technology and by the level of quality of the companies", said Roques in an interview to Valor.
Created in 2003 by a group of independent European investors, Truffle Capital currently manages two funds: Truffle Venture FCPR and Truffle Capital II, with resources of nearly € 600 million - € 200 million more than in the beginning of 2010. The company has interest in 40 IT, biotechnology and bioenergy companies headquartered in Europe and the United States. Among the emerging economies on the agenda of Truffle, Brazil caught its attention. "Is the country that has one of the higher averages of growth, a growing middle class besides being a stable democracy. Those are characteristics of a good market", says Roques.
The first step of Truffle Capital in Brazil was taken by one of the companies of its portfolio, the French LeadMedia, which in June acquired, for an undisclosed amount, the discounts site Busca Descontos and the digital marketing company Media Factory, for R$ 8.9 million (US$ 5.2 million). The President of LeadMedia, Stéphane Darracq, remarks the company and others of the portfolio of Truffle Capital, has great market share in France and now seeks internationalization by means of acquisitions of complementary business.
MediaFactory, which belonged to the IdeiasNet group, was purchased in December by LeadMedia, which earned R$ 12 million (US$ 6.8 million) in 2010, with growth of 200%. With the acquisition, concluded last week, LeadMedia foresees doubling in size in 2011, with US$ 25 million in earnings. Due to the success of the first acquisitions, Truffle Capital evaluates companies in Rio de Janeiro and São Paulo, in the areas of IT, bioenergy and biotechnology, with annual average income of R$ 7 million (US$ 4.1 million). According to Roques, the next companies of its portfolio to make acquisitions in the country will be BoosterMedia, focused on social games and software for mobile devices, and Pharnext, pharmaceutical company aimed at dugs for neurological diseases.
Truffle Capital also seeks investing partners in Brazil to launch an investment fund. "I believe in two years we will have the fund focused solely on the Brazilian market", says Roques. The size of the fund, compared to the resources invested in Europe, will be proportional to the ratio between the Gross Domestic Product (GDP) of Brazil and the GDP of France - nearly 60%, which would be nearly € 360 million.