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Advent in Brazilian financial services exit

The Boston-based private equity firm sold its remaining shares in Cetip, a fixed income securities and over-the-counter derivatives depository, for nearly twice the company’s 2009 IPO price.

Advent International has completed its exit of Cetip, a Brazilian depository for private fixed income securities and over-the-counter (OTC) derivatives, after selling its remaining 10 percent stake to IntercontintentalExchange.

ICE, a global operator of exchanges, clearinghouses and over-the counter markets, purchased Advent's stake along with a 2.5 percent stake belonging to Brazilian bank Itau Unibanco for $512 million cash.

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The Boston-based private equity firm purchased a 32 percent stake in Cetip in 2009 for R$360 million, which at the time was the equivalent of a $170 million investment, through its fourth $1.3 billion Latin American Private Equity Fund. The fourth fund has performed well, generating a 20.8 percent internal rate of return with a 1.5x multiple as of 31 December, 2010, according to the California Public Employees' Retirement System. 

Shortly after Advent acquired its stake, Cetip held an R$881 million (€396 million; $600 million) initial public offering, during which the firm sold a portion of its holdings. Advent sold additional shares in a block trade earlier this year.

ICE will pay R$25.50 (€11.48; $16.20) per share for 31.6 million shares in Cetip, a weighted average of the company’s share price over the last 90 days and nearly twice its R$13 IPO share price.

Advent has made 15 investments in Brazil since 1997. The firm’s current fund, its fifth focused on Latin American investments, raised $1.65 billion in 2009.