The article aims to give an opinion on the prospects of the M&A market in Brazil and Latin America based on data and information from the TTR Data report of May 2023.

In the period from January to May, Latin America recorded a total of 673 transactions, 364 M&As and 203 venture capital operations, according to the report by TTR Data. Brazil, Chile and Mexico continued, in this order, with greater activity than Argentina, Colombia and Peru. Brazil was the country with the highest volume of domestic operations.

We already know that the scenario is not the best compared to the same period in 2022, and the recurring lack of disclosure of valuations somewhat impairs the analysis of the volume of cash transactions. But within what is disclosed in the TTR report, we observe an increase in transactions of between US$50mn and US$100mn in the last five years. The internet, software and IT were the leading subsectors with the highest number of deals. It is important to highlight that since 2010, companies headquartered in the US are the ones that have acquired most Brazilian companies and we currently have 60 operations in 2023.

It is not just the US, we also have the UK and Spain eyeing LatAm companies and also looking for internet businesses, software, business & professional support services and specific software. The volume of business & professional support services leads us to reflect that the search for labor has driven M&A operations, remote work has helped this demand and Latin America has become quite attractive.

When the theme is acquisitions carried out by firms from Latin American countries, the US, Chile and the UK are countries where we see most operations in the specific software, internet, IT banking and investment sectors.

Although the M&A market is down compared to the same period in 2022, technology deals and expansion strategies have taken place in a positive way for the Brazilian market, such as Digibee, which closed a series B financing of US$60mn. It is the connector platform of software integration for which I had the privilege of conducting due diligence in a previous round carried out by Brasil Venture Debt. 

In addition to the existing shareholders, Digibee now has another team of investors of equal weight such as Goldman Sachs, Vivo Ventures, and Kfund that made its first investment in Latin America, confirming the interest of foreigners in the Brazilian technology sector.

Besides Digibee, which brings us good news in terms of internationalization strategy, we cannot fail to mention early-stage M&A opportunities such as those presented in the TTR Radar report, which presents intelligence aggregation alliances to achieve greater market expansion, such as the franchisor of mini markets Minha Quitandinha through its partnership with the Rio metro to serve its employees and expand into corporate segments. As in the case of Quitandinha, it is possible to tap into other M&A opportunities.

When I analyze the TTR Radar I realize that there are several opportunities that maybe the period of M&A crisis educated us about regarding new models of doing M&A, being more aware of the value that needs to be added to the business in a more sustainable and realistic way. Are we facing a new way of doing and thinking about M&A outside the traditional big deals?

Source: Business News Americas / BN Americas - Chile