Carlyle invests in Brazilian lingerie maker

Adding to its previous investments in Latin America’s largest economy, the firm will purchase a majority stake in Scalina, a major manufacturer of hosiery and lingerie.

The Carlyle Group has struck its third buyout deal in Brazil with the purchase of Scalina, the country’s largest hosiery and lingerie manufacturer. Financial details were not disclosed, but a source familiar with the matter said Carlyle would invest roughly $125 million for a 51 percent stake in the company.

Equity for the deal came from Carlyle’s South America Buyout Fund, launched in 2009, and FIP Brazil de Internacionalização de empresas (FBIE), a local fund managed by Carlyle and advised by Banco do Brasil.

“We are pleased to partner with [Scalina] founders Ronaldo and Bruno Heilberg as we tap into the expanding demand for quality hosiery and lingerie among Brazil’s growing consumer market,” Carlyle managing director Juan Carlos Felix said in a statement.

Founded in 1963, Scalina claims to have approximately 10 percent market share in Brazilian hosiery and lingerie, with over R$400 million ($228 million; £147 million) in revenues. The company has two flagship brands: TriFil, which sells in over 13,500 multi-brand retail stores, and Scala, which sells in roughly 100 franchised stores as well as multi-brand retailers. In the last five years, the hosiery and lingerie sector in Brazil has grown at nearly double the rate of GDP, and grew 3.6 percent in 2009 while the country’s overall GDP contracted 0.2 percent.

Last month, Carlyle made its second investment in Brazil by purchasing Qualicorp, a consultant and management firm for private health insurance plans. Financial terms of the transaction were not disclosed, but a source close to the matter told PEO the firm invested over $1 billion in the deal. Equity for the transaction came from Carlyle Partners V, a $13.7 billion buyout fund, and the firm’s Sough American Buyout Fund.

“Brazil’s stability, growth and credibility in the global economy make it a particularly attractive place to invest now,” Carlyle managing director Stephen Wise said in a statement in July.

Brazil has been a hot market for private equity this year. In May, London-based Apax Partners made its debut in the country with a $1 billion investment for a 54 percent stake in Tivit, an integrated IT company. Also that month, energy investment giant First Reserve announced it was investing $500 million in Brazil-based Barra Energia, an independent exploration and production company.

Carlyle’s first major private equity investment in Brazil came this January when the firm invested $250 million for a 63.6 percent stake in CVC Brazil Operadora e Agencia de Viagens, a major operator of tours and travel services throughout Latin America. Carlyle had previously invested in Brazil, but not in traditional private equity deals. The firm’s South American real estate team made investments in the country, but that platform has been wound down.