Blackstone pays $200M for stake in Brazilian rival

Blackstone Group will pay $200 million for a 40 percent stake in Brazilian private equity firm, Patria Investimentos. Blackstone will pay for the deal through a mixture of cash and stock and the acquisition is being made by Blackstone itself, not one of its private equity funds. Brazil’s economy is expected to expand this year, while the Brazilian economy already makes up 45 percent of Latin America’s GDP.

(Reuters) – U.S. private equity giant Blackstone Group plans to buy a 40 percent stake in Brazilian rival Patria Investimentos for about $200 million, a source familiar with the matter said on Wednesday.
The news was earlier reported by Valor Economico newspaper, which said that a deal could be signed later on Wednesday.

Blackstone will pay for the deal through a mixture of cash and stock, the source told Reuters. The acquisition is being made by Blackstone itself, rather than through one of its private equity funds.

Private equity firm Patria will hold the remaining 60 percent stake in the company, the source said.
Blackstone and Patria have had an agreement since 2004 to operate in Brazilian deals, but so far no transactions have been done where the the two firms invested jointly, the daily reported.

Large U.S. and European buyout firms have been increasingly looking further afield for investment opportunities, seeking faster growing places to put their money than the mature U.S. and Western European economies.

Brazil’s economy is set to expand this year at its fastest pace in more than two decades, making the country a target for companies such as Blackstone and Carlyle Group [CYL.UL], which made its first investment in the country earlier this year.

Brazil makes up for half of Latin America’s gross domestic product and 45 percent of private equity investments in the region, according to Emerging MarketsPrivate Equity Association data.

(Reporting by Elzio Barreto and Guillermo Parra-Bernal in Sao Paulo and Megan Davies in New York; Editing by Derek Caney)