June 14, 2012 / 8:21 PM / 7 years ago

UPDATE 2-BTG Pactual pays $52 mln for Colombian brokerage

* BTG Pactual to buy Colombian brokerage, source says

* Bolsa y Renta is Colombia’s 5th biggest stock broker

* Comes as Brazil banks seek growth in Andean nation

By Guillermo Parra-Bernal and Aluísio Alves

SAO PAULO, June 14 (Reuters) - BTG Pactual, Brazil’s sole listed investment bank, agreed to pay $52 million for Colombian securities firm Bolsa y Renta, in a bid to grow in the Andean country’s burgeoning capital markets.

BTG Pactual, controlled by Brazilian billionaire André Esteves, said it will pay $52 million in cash and stock for Bogota-based Bolsa y Renta, according to a securities filing. Partners at Bolsa y Renta have the right to subscribe $32.5 million of BTG Pactual stock, under terms of the deal.

“The goal of both companies is, with this deal, to broaden the product and service portfolio that Bolsa y Renta currently offers, generating benefits to clients and employees,” the filing said.

Since it was formed it 2009, BTG Pactual has been on a deal-making frenzy in Brazil and abroad as Esteves, also the bank’s chief executive and its majority shareholder, strives to turn the firm into the largest investment bank in emerging markets by the end of the decade.

The Bolsa y Renta deal is the third acquisition that BTG Pactual made since raising $1.99 billion in an initial public offering in April. Earlier in the year it paid $600 million for Chile’s Celfin Capital, a securities and wealth management firm.

Bolsa y Renta is Colombia’s largest brokerage by trading volume, according to the filing. The deal includes a staff retention package that will keep management and partners of Bolsa y Renta for at least four years following the completion of the transaction.

Units of BTG Pactual, a blend of common and preferred shares of its investment-banking and private-equity divisions, rose for the third day in four on Thursday, adding 1.2 percent to 26.20 reais. The stock has shed 16 percent since its April 26 debut in the São Paulo Stock Exchange.


Bolsa y Renta partners including Colombia’s Vargas family and Chief Executive Juan Luis Franco could buy the units at a fixed price of $14.11 each, according to the filing. Both firms had been negotiating a deal since the end of 2011, when a non-binding agreement was signed.

The deal requires approval from regulators in both countries, according to the filing. São Paulo-based BTG Pactual, which has offices in New York, London and Hong Kong, is also present in Mexico, Chile, Peru and Colombia.

Brazilian rivals including state-controlled Banco do Brasil are also on the lookout for banking assets in Colombia. This year, Itaú BBA, the investment-banking unit of financial behemoth Itaú Unibanco Holding, started a wholesale banking unit based in Bogotá, with about 40 bankers.

Colombia is South America’s second-most populous country and, like Brazil, has a diversified economy that includes oil, coal, agricultural commodities and manufacturing. Last year, Colombia’s economy became South America’s second largest after Brazil.

Bolsa y Renta, which was founded in 1953, had 265 employees and assets worth about $36 million as of the end of last year. The brokerage earned $7.7 million in 2011, according to data found on its Website.

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