Brazil’s Unidas files for IPO weeks after Enterprise deal: Reuters

Brazilian car rental firm Unidas SA on Monday announced an initial public offering in São Paulo in a securities filing, one of the few IPOs in the last two years in Latin America’s largest economy.

The plan was announced a month after Enterprise Holdings Inc , the world’s No. 1 car rental firm, bought a 20 percent stake of Unidas from three funds.

The investment-banking units of Itaú Unibanco Holding SA, Bank of America Corp, JPMorgan Chase & Co and Haitong Securities Co Ltd were hired to manage the IPO. Information on the size, the timing or the suggested price tag for the deal were not disclosed in the filing.

Growing appetite for risk among local investors and expectations of a more business-friendly government following former President Dilma Rousseff’s ouster earlier this year could help resuscitate a market that has seen few IPOs in the last two years. That compares with 10 over the previous two years.

Last week, homebuilder Gafisa SA said the IPO of low-income builder Construtora Tenda SA, expected for mid-December, could raise up to 660 million reais ($195 million). State-controlled lender Caixa Econômica Federal will pick the banks managing the IPO of an insurance unit as early as this week.

The request also underscores the resilience of car rentals despite Brazil’s harshest recession in eight decades, high unemployment and a slump in consumer and corporate spending. Rental growth at Unidas fared better than expectations in the first half, signaling pricing flexibility and a better use of current capacity.

Enterprise bought the minority stake from private-equity firms Gávea Investimentos Ltda, Vinci Partners and Kinea Investimentos Ltda, which before the deal held a combined 65 percent in Unidas. Portugal’s Principal Gestão de Activos SA owns a remaining 35 percent stake.

The three funds had bought into Unidas five years ago, increasing their stake two years later.