Cescon, Barrieu, Flesch & Barreto Advogados and Stocche Forbes Advogados have helped the Canada Pension Plan Investment Board (CPP Investments) acquire a minority stake in Brazilian water and sanitation company Iguá for 1.2 billion reais (US$228 million).
Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados advised Canadian investor Alberta Investment Management Corporation (Aimco), which partnered with CPP for the investment. BNDES Participações, the investment arm of the Brazilian development bank, also participated in the acquisition.
Iguá relied on local counsel from Pinheiro Neto Advogados.
Brazilian firm Dias Carneiro Advogados advised Cyan Fundo De Investimento Multimercado Investimento, a private equity firm that divested its shares in Iguá as part of the same transaction.
The deal closed on 28 April.
CPP and the partner investors acquired direct and indirect shares equal to a 45% interest in Iguá. Cescon Barrieu advised CPP on the acquisition of new shares issued by Iguá in the transaction, while Stocche Forbes helped the company acquire an equity stake from a group of selling shareholders.
In exchange for the shares, the Canadian buyer agreed to provide funding in two portions.
In the first half, CPP will pay 514 million reais (US$97 million), which Iguá will use to fund its growth objectives.
CPP will then provide a second instalment of 664 million reais (US$125 million). That funding will also be paid to existing shareholders that wish to exit the company, such as Cyan as well as Brazilian bank Bradesco.
CPP will hold its 45% stake through investment funds FIP Iguá and FIP Mayim, which are controlled by Brazilian private equity company IG4 Capital and Canadian counterpart Aimco.
With the acquisition, Iguá formed a consortium with the partner investors and successfully bid for assets at an auction held by Rio de Janeiro’s state water and sewage company CEDAE.
Iguá won block 2 of four clusters of sanitation assets auctioned by CEDAE on 30 April. The block of water and sewage facilities serves around 1.2 million people across the state of Rio de Janeiro. Brazilian water company Aegea Saneamento, which also teamed up with a series of investors to launch a bid in the auction, won blocks 1 and 4 with an offer of US$2.9 billion. There were no bidders for the third block.
Iguá Saneamento provides water and sewage services across 18 states of Brazil, reaching six million people in total. Aside from CPP’s ownership, the rest of the company’s shares are split between IG4 Capital, BNDESPar and Aimco.
CPP Investments is a government-owned Canadian private equity group. It counts around US$392 million worth of assets under management.