Big break for small multinationals

Capital Aberto

A private equity fund focusing on potential multinationals, which are located in the inland regions of Brazil’s São Paulo and Paraná states and which earn US$ 9-and US$ 90 million a year. Such is the target of Trivèlla M3, an equity fund that has been mapping the market for the past year and plans to begin investing in February. “These are applied technology companies that develop world-class, competitive products and have the potential to consolidate their markets via acquisitions in other countries, but don’t have access to capital”, states Jon Toscano, a partner atTrivèlla, the fund’s manager.

The candidate investees are usually companies founded near universities, such as those in the cities of São Carlos, Campinas, and Londrina. Bematech exemplifies a typical candidate profile. The commercial automation company was established in Paraná in 1990 and went public on the BM&FBovespa’s Novo Mercado in 2007. The M3 in the fund’s name stands for Marcel Martins Malczewski, a co-founder of Bematech, which received investments from a BNDESPar fund managed by Dynamo asset management. The investee is now the investor.

Trivèlla M3 operates with a total equity of US$ 6 million contributed by Trivèlla, M3 and a third investor that prefers to remain unnamed. The money is enough to buy stakes in only three companies, which must each offer the fund a seat on their boards of directors. In return they will receive assistance not just of a financial nature, but also with management and corporate governance, not to mention help with pinpointing possible acquisitions in Brazil and other countries. The asset managers consider the small multinationals niche so promising that they’re already planning to carry out their next fundraising procedure by the end of the year. This time, they expect to raise a total of US$ 120.3 million. “We’ve already identified some companies that would require investments of up to US$ 18 million”, Toscano says.