AIG leads $433m Brazilian deal(2)

The company’s private equity division has led a consortium in buying Compania Providencia Industria e Comercio for $432.6m, making it one of the largest Brazilian deals of late.

AIG Capital Partners has bought Compania Providencia Industria e Comercio, a Brazilian maker of non-woven goods, for approximately $432.6 million (€333.5 million; R$930 million).

Providencia’s non-woven products are made of a fabric consisting of polypropylene, a lightweight plastic that resists moisture, solvents and oil. The company makes disposable goods like diapers and feminine products, as well as durable ones like auto-parts and furniture, AIG said in a statement. 

The company plans to increase its exports to the US and Latin America, Fernando Borges, the chief executive officer of AIG Capital Investments in Brazil, said in the statement.

AIG used its AIG Global Emerging Markets Fund II to make the investment. Brazilian private equity fund Governanca e Gastao, Portuguese financial group Banco Espirito Santo and Brazilian transportation group the Constantino Familyalso took part in the deal. Banco Santander provided half the financing of the purchase price. 

This investment comes as the Brazilian private equity market has begun to pick up after the slow down that followed the collapse of the internet boom in 2001. Though it has not seen the same degree of growth as other emerging markets like China and India, the country has seen a number of significant initial public offerings. The largest of those was the $350 million IPO of Gafisa, a home-building company backed by the Brazilian firm GP Investimentos and the US firm Equity International.