SAO PAULO (Reuters) -Brazilian retailer Magazine Luiza will raise funds through a follow-on share offering and buy technology and e-commerce company Kabum Comercio Eletronico for 2.7 billion reais ($528 million), the company said in a securities filings on Thursday.
The retailer will pay 1 billion reais in cash and 75 million shares in a cash and stock deal, it said in the filing. The deal’s value may rise to 3.866 billion reais depending on certain targets being met by Kabum by 2024.
The value is based on the 22.93 reais closing price of Magazine Luiza shares on Wednesday. Closure of the deal is subject to approval by Brazil antitrust watchdog CADE.
Kabum, founded in the city of Limeira, in Sao Paulo state, in 2003, focuses on sales of products related to games.
Magazine Luiza said it would issue 150,000 new shares to fund the acquisition. Based on Wednesday’s closing price, the offering, to be priced on July 22, could raise 4.6 billion reais.
Magazine Luiza, one of Brazil’s largest retailers, said it will expand the number of stores in the country from 1,440 by the end of this year to 1,680 by 2023. It plans to raise the number of distribution centers to 33 by the end of 2023 from 26 in 2021.
($1 = 5.11 reais)
Reporting by Paula Arend Laier; Editing by David Goodman, Jason Neely and Dan Grebler
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