SÃO PAULO--(BUSINESS WIRE)--A group of investors of Boa Vista signed a letter delivered to the Board of Directors at the end of February to state that they do not accept the offer of R$ 8 per share to merge Boa Vista with the non-operational Brazilian subsidiary of Equifax.
The shareholders TMG II FIP - Multiestratégia, Brizo Capital, LP, Madison Avenue International LP and Absolute Investimentos (“Minority Shareholders”) are part of said group and do not believe the offer reflects the real value of Boa Vista, and particularly does not reflect the value for Equifax of becoming the second largest player in the Brazilian credit service market, a fact that would allow Equifax to become the leader in Latin America. The implicit multiple in the offer, 8.9x of Boa Vista’s EBITDA, is low, particularly when compared with the 19.3x multiple for Equifax at the time of the offer. Since its IPO in 2020 on the B3 exchange, Boa Vista’s revenue has had double digit yearly growth rates and has more than doubled its EBITDA, despite the economic turbulence caused by the pandemic. The company’s database and its strategic value in the region are unique and ensure an advantage to whomever acquires them, elements also not considered in the current offer, stresses the group.
In addition to this, Boa Vista has more than R$ 1 billion in net cash and has been consistently growing more rapidly than Equifax, all elements that justify a much higher price, explains the group. At this price, the Minority Shareholders believe that the shareholders are better served by keeping Boa Vista independent.
Despite statements in the press to the contrary, the closing of this acquisition is still subject to the approval of the shareholders of Boa Vista in an extraordinary general meeting (EGM) that has still not been convened.
From the Minority Shareholders’ point of view, it is reasonable to question the right to vote in the EGM for both Equifax and the Commercial Association of Sao Paulo (ACSP), since Boa Vista will need to exit from the Novo Mercado segment of the Brazilian Stock Exchange for the transaction to happen and there is a conflict of interest of both parties: Equifax is simultaneously both the acquiror and part of the acquired company, while ACSP benefits from the transaction in ways that the other shareholders do not.