São Paulo, Brazil, April 14, 2008 – GP Investments, Ltd, the leading Latin American private equity firm, has signed an agreement to acquire 100% of Laticínios Morrinhos (“Leitbom”) for a base-price of R$308 million, to be confirmed after due auditing of Leitbom´s net debt and working capital levels to happen on April 14th, 2008 . In addition, GP Investments will also contribute R$18 million in the company. The full investment will be made through GP Investments' private equity fund, GP Capital Partners IV, L.P., managed by GP Investments IV, Ltd., a wholly-owned subsidiary of GP Investments.
Leitbom is one of the fastest-growing Brazilian dairy companies, headquartered in Goiânia. The company began its operations in the city of Morrinhos (Goiás) in 1964. Today it has seven production plants: five in the state of Goiás, one in the state of Pará and another one in the state of Tocantins.
Among approximately 380 dairy producers in Brazil, Leitbom ranks 5th in terms of yearly milk collection(1). Leitbom’s product mix is very well balanced among the main dairy product categories: powdered milk, condensed milk, cream, flavored milk drinks, cheeses and ultra-high temperature (UHT) milk. The company’s products are sold throughout Brazil.
In 2007, Leitbom posted an EBITDA of R$69 million, representing a margin that is above the industry’s average. In the first quarter of 2008, the company reported a 27% revenue growth when compared with the same period of 2007.
The acquisition of Leitbom provides a unique opportunity to enter the Brazilian dairy sector and to benefit from the consistent growth of the domestic and foreign demand for dairy products. The dairy sector in Brazil is poised to become more open to international trade and investment, a fact that should reinvigorate and restructure the industry. GP Investments is well positioned to take advantage of these conditions by investing in Leitbom and enabling the company to strengthen dairy supply to both national and global markets.
ABOUT GP INVESTMENTS, LTD.
GP Investments is the leading private equity firm in Latin America. Its mission is to generate higher than average long-term returns to its investors and shareholders. Since its inception in 1993, GP Investments and its predecessors have raised more than US$3.0 billion from international investors and have acquired forty six companies in fourteen different sectors. In May 2006, GP Investments concluded its initial public offering (IPO), becoming the first listed private equity company in Latin America.