Dasa said today that its parent company, the Bueno family, and BTG Pactual have committed to injecting BRL 1.5 billion into the company, a move that will allow the laboratory giant to reduce its leverage at a time when the Selic rate is at 13.75%.
In a statement, the Bueno family said they will subscribe R$ 1 billion in a follow-on which should be released soon, while the equities of BTG committed with the remaining BRL 500 million.
If demand exceeds BRL 1.5 billion in the offer, the controllers may choose to reduce BTG’s anchoring or exercise the hot issueraising the total amount of the offer.
The capital increase – at a time when Dasa shares are trading close to historic lows – was set at R$8.50/share, an 11% premium over today’s close.
Reflecting both the meltdown of the Brazilian Stock Exchange and the company’s challenges, Dasa is currently trading 85% below the price of its re-IPO, in April 2021, which came out at R$ 58 per share.
The paper hit low history – R$6.79 – three days ago.
As an additional benefit, shareholders who subscribe to the offer will also receive a subscription bonus in the proportion of 10/1: that is, for every 10 shares subscribed, the investor will receive 1 warrantwhich will give the right to buy new shares for the same offer price, but two years from now.
Minority shareholders will have preemptive rights in the offer in proportion to their holdings; the dilution for those who do not follow the offer will be around 30%.
The capitalization should help Dasa reduce its leverage, which ended the third quarter (the last one published) at 3.8x EBITDA. On that date, the company had a net debt of R$7.7 billion and an EBITDA of R$2.1 billion in the last twelve months.
With the entry of BRL 1.5 billion into cash, leverage should drop to something close to 3x.
The decision to make follow-on comes following Dasa discussed other options for raising funds. The company held discussions with Bain Capital and Advent for a capital injection, but these conversations ran into issues ranging from company governance to the size of the check, people familiar with the matter told the Brazil Journal.
According to these sources, one of the managers would only be willing to close a deal if it might make a substantial check in dollars – which, with the weakened stock, would generate even greater dilution for the current shareholders.
Geraldo Samor and Pedro Arbex
