ACON acquires Brazilian supermarket

The Washington, DC-based affiliate of the Texas Pacific Group has acquired Gbarbosa, a Brazilian supermarket chain, its third investment in a Latin American retailer.

Washington, DC-based private equity firm ACON Investments has acquired Gbarbosa Commercial, a Brazilian supermarket chain, from international food retailer Koninklinjke Ahold NV.

Terms of the transaction were not disclosed, although earlier reports indicated the price was approximately $120 million (€92 million).

As part of the transaction, ACON partnered with several investors, including two European development finance institutions:  the Netherlands Development Finance Company (FMO) and its German counterpart, DEG.

ACON was founded in 1996 by Ken Brotman, Jonathan Ginns and Bernard Aronson, formerly an international advisor to Goldman Sachs on Latin America and Assistant Secretary of State for Inter-American affairs. The firm, affiliated with the Texas Pacific Group, has managed approximately $725 million of capital.

Gbarbosa, the seventh largest supermarket in Brazil, operates 32 markets in the northeastern state of Sergipe and generates revenues of approximately R$1 billion ($388 million; €300 million) according to a statement.

Brotman noted that the food retailing industry has a number of benefits, including its relative insulation from economic cycles. In emerging markets such as Brazil, he added, the opportunity is greater given growing populations and socioeconomic levels and the growth of formal retailing versus the informal markets.

ACON has been an active investor in Latin American retailers. In 2000, the private equity firm merged two of its portfolio companies, Vivero, a Columbian national chain of super centers, and Carulla, a Bogota supermarket chain, to form Carulla Vivero. Last year, ACON purchased an interest in Fybeca, an Ecuadorian pharmacy chain.

Although ACON doesn’t invest exclusively in Latin America, the region has drawn a fresh round of interest from private equity funds. In 2004, limited partners committed approximately $1 billion (€800 million) of capital to Latin America focused private equity funds according to figures compiled by Venture Equity Latin America. While this represents a significant increase over the $417 million raised in 2003, the height of the region’s fundraising occurred in 1998, when Latin American private equity funds rounded up more than $3.6 billion.