Paul Hastings LLP in New York and Brazil’s Cescon, Barrieu, Flesch & Barreto Advogados have helped Brazilian e-commerce start-up Méluiz raise 583 million reais (US$103 million) in an IPO that priced at the bottom end of the target range.
US firm Skadden, Arps, Slate, Meagher & Flom LLP and Machado Meyer Advogados in São Paulo advised the underwriters in the deal, while local firms Azevedo Sette Advogados, Baptista Luz Advogados, Lefosse Advogados and Lima Netto Carvalho Abreu Mayrink Sociedade de Advogados were all counsel to the Brazilian selling shareholders. A group of European stakeholders enlisted Spain’s Pérez-Llorca for the transaction, which closed on 6 November.
Méluiz sold over 58 million shares on Brazil’s B3 stock exchange for 10 reais (US$1.85) each. That was on the lowest rung of a target range between 10 reais (US$1.85) and 12.50 reais (US$2.31). Méluiz issued 22,360,000 shares as primary stock, with the proceeds returned to the company, while the profits from the remaining 29,640,000 secondary shares were paid to existing investors. The offering was nearly three times oversubscribed.
The fintech group will use its portion of the proceeds to expand its offering of e-commerce services in Brazil, as well as for future acquisitions.
Méluiz counts Brazilian venture capitalist Monashees and US financial groups Endeavour Catalyst and Lumia Capital among its previous investors. The Brazilian start-up provides e-commerce payment services to around 800 companies. As of June this year, Méluiz’s online network has around 10 million registered accounts.
Brazil has seen a slew of IPOs recently. Local sports retailer Track & Field raised US$81 million in an IPO last month, which fell below the target. The amount of that transaction was in contrast with Brazilian logistics company Hidrovia’s US$615 million IPO in September, which is Brazil’s largest initial public offering so far in 2020. Local pet retailer Petz raised US$543 million that same month too.
Latin American fintech companies have equally continued to attract venture capital investment in recent months as demand for cashless payment alternatives has accelerated amid the covid-19 pandemic. Local online payment platform Conductor raised US$150 million in an October funding round, while Brazilian fintech Neon doubled that amount with its third investment round earlier this year. Meanwhile, online payment company dLocal broke records in September when it became Uruguay’s first unicorn start-up with a US$200 million cash injection.
Méluiz’s net income for the first half of 2020 was 12 times the size of its figures for that same period in 2019. Its revenue shot up from 35 million reais (US$6.5 million) to 56 million reais (US$10.2 million) in the same time frame too.
Counsel to Méluiz
Paul Hastings LLP
Partner David Flechner and associates Filipe Lima and Diana Balassiano in São Paulo, and partner David Makso, counsel Vadim Avdeychik, and associate Rob Wilson in New York
Cescon, Barrieu, Flesch & Barreto Advogados
Partner Alexandre Barreto and associates Julia Barreto Lobo Dutra, Bernardo Kahl, Victor Lopes, Carolina Carvalho, Vitor Campos and Isadora Moreira in São Paulo
Counsel to Bradesco BBI, BTG Pactual, Itau BBA and XP Investments
Skadden, Arps, Slate, Meagher & Flom LLP
Partner Mathias von Bernuth, counsel Jonathan Lewis, and associates Carlo von Hanstein, Julien Apollon and Vinicius Fadanelli in São Paulo, and partner Victor Hollender and associate Ryan Rott in New York
Machado Meyer Advogados
Partner Gustavo Secaf Rebello and associates Fernando Becker Mau and Alexandra Palhares in São Paulo
Counsel to the different selling shareholders
Azevedo Sette Advogados
Partner Luis Ricardo Miraglia in São Paulo
Baptista Luz Advogados
Partners Luis Felipe Baptista Luz and Luciana Simões Rebello Horta, and associates Sergio Cury Meirelles and Adriana Gomes dos Santos in São Paulo
Partners Ricardo Prado and Mauricio Paschoal, and associate Rodrigo Felli Paes de Barros in São Paulo
Lima Netto Carvalho Abreu Mayrink Sociedade de Advogados
Partners Rodrigo Lima Netto and Luis Alvim, and associate Mariana Gontijo in São Paulo
Partner Carmen Reina and associate Borja Gil Casares in Madrid