SÃO PAULO, Brazil - A planned stock offering of a Brazilian tour agency and operator backed by the Carlyle Group could raise as much as 1 billion reais ($428 million) for its existing shareholders, according to a filing on Wednesday.
Despite Brazil’s current economic woes, Carlyle and the company are betting that Brazil’s growing travel sector will remain attractive to investors as the country hosts next year’s World Cup and the 2016 Olympics, and as Brazil’s middle class grows.
The tourism company, CVC Brasil Operadora e Agência de Viagens, plans to list on the BM&FBovespa Novo Mercado, based in São Paulo.
The company, which says it is generating enough cash to continue growing, will not receive any of the proceeds from the offering. Instead, its existing shareholders plan to sell at least 33.75 million shares, representing about 26 percent of the company.
The Carlyle Group, through its Brazilian investment vehicle, will sell about 21.5 million shares, and the investment entity of the CVC founder, Guilherme Paulus, will sell nearly 11.5 million shares.
The company, which submitted a preliminary prospectus last month, also said Wednesday that the shareholders may sell an additional 11.8 million shares.
CVC tentatively expects to price at the offering at 18 to 22 reais. Based on the midpoint of the range, if the additional shares are included, the offering would raise 911.25 million reais.
CVC, founded in 1972, was Latin America’s top tourism company in 2012, according to the market research firm Euromonitor International.
Net income for CVC for the first nine months of this year was 71.8 million reais, compared with 78.2 million reais during the same period in 2012.
CVC said it would begin its roadshow Wednesday, and that the subscription period for investors in Brazil and the United States will be from Nov. 22 to Dec. 4. It anticipates expects to set the price of the offering on Dec. 5 and begin trading on Dec. 9.
Brazilian investment bank Itaú BBA is the lead underwriter with Morgan Stanley, Bank of America Merrill Lynch, BTG Pactual, and JP Morgan also participating.
After the offering, Carlyle, which acquired CVC in 2009, would retain control and remain its largest shareholder with more than 61 million shares.
This is CVC’s second attempt to list in Brazil. It suspended its initial effort in 2012 because of tough market conditions. Since then, it has replaced its president, bringing in Luiz Eduardo Falco, former head of the telecommunications firm Oi and executive with TAM.
