Grupo BTG Pactual, Brazil’s only publicly traded investment bank, gained about 4.4 billion reais ($1.5 billion) on its stake in medical-care provider Rede D’Or Sao Luiz SA, according to a person with direct knowledge of the matter.
BTG, which bought 25.6 percent of Sao Paulo-based Rede D’Or in 2010 for about 600 million reais, now has a stake of 23.6 percent valued at 4.97 billion reais after a capital raise announced yesterday, the person said, asking not to be identified because the holding isn’t public.
Carlyle Group LP bought an 8.3 percent piece of Rede D’Or for 1.75 billion reais in the capital raise, which values the entire company at 21 billion reais and diluted BTG’s original stake, the person said. BTG books the convertible bonds used for its original investment in its corporate-lending portfolio, according to the person.
Private-equity firms such as Carlyle are looking for hospital investments after a new law allowed foreign ownership of health-care facilities in Latin America’s largest economy. Carlyle declined to comment on its Rede D’Or transaction.
Brazil is home to tens of millions of would-be patients who joined the country’s middle-class when Brazil’s economy was booming. The public-health system is struggling to keep pace with population growth, encouraging investment in private health companies, Tracy Francis, a McKinsey & Co. consultant, said in February.
Several other groups have expressed interest in making Latin American investments recently. In March, Moody's Corp. (NYSE: MCO) announced a deal for Lima, Peru-based Equilibrium, a credit ratings group. Before that, in November, Macquarie Group's energy markets division invested in Brazilian electricity group Nova Energia.
--Additional reporting by Allison Collins