Brazilian toy retailer Ri Happy prepares $300 million IPO -paper (updated)

Banco Bradesco

24/11/2017 14:03

(Adds background) 
    SAO PAULO, Nov 24 (Reuters) - Brazil's largest toy retailer, 
Ri Happy Brinquedos SA, owned by U.S. private equity firm 
Carlyle Group LP  CG.O , has hired banks for an initial public 
offering, seeking to take advantage of a retail rebound in 
Brazil, Valor Economico newspaper reported on Friday. 
    The IPO is expected to raise 800 million to 1 billion reais 
($310 million), according to preliminary projections, the 
newspaper said, citing unidentified sources. The company expects 
to go public on the first quarter of 2018. 
    Carlyle has hired the investment banking units of Grupo BTG 
Pactual  BPAC11.SA , Goldman Sachs & Co, Itaú Unibanco Holding 
SA  ITUB4.SA , Credit Suisse Group AG  CSGN.S  and Banco 
Bradesco SA  BBDC4.SA  as underwriters, according to the report. 
    The proceeds will be used to fund expansion and Carlyle also 
will sell part of its stake in the company.  
    Contacted by Reuters, Goldman Sachs, Carlyle and Bradesco 
declined to comment. The other banks did not immediately respond 
to requests for comment. 
    Retail and Brazil's consumer sector generally are on the 
leading edge of an economic recovery in Latin America's largest 
economy. 
    Carlyle acquired Ri Happy and smaller rival chain PB Kids in 
2012, betting that sales would continue rising solidly after an 
8 percent increase that year. 
    But the sector suffered as Brazil fell into its deepest 
recession in a century. In 2016, retail sales posted their worst 
result in at least 15 years. 
    Other specialty retailers, such as sports goods chain Lojas 
Centauro, owned by Grupo SBF SA, are taking advantage of higher 
investor demand to raise capital for expansion plans. Some of 
these retailers are emerging from debt restructurings. 
 urn:newsml:reuters.com:*:nL1N1NN0P5 
    Several Brazilian companies that have recently filed for 
IPOs say they will use proceeds to fund expansion plans. That is 
a welcome change when compared to similar transactions earlier 
this year, which were mostly aimed at repaying debts. 
    Ri Happy's IPO also would be one in a series of IPOs at the 
end of 2017. Companies are racing to go public amid concerns a 
wide-open 2018 election may cool demand for new stock issues, 
Reuters reported on Nov. 14.  urn:newsml:reuters.com:*:nL1N1ND1O4 
    Electronics retailer Magazine Luiza SA  MGLU3.SA  and 
supermarket chain Carrefour Brasil  CRFB3.SA  have unveiled 
expansion drives, adding to signs of economic recovery after 
Brazil's harshest recession in a century. 
    ($1 = 3.22 reais) 
 
 (Reporting by Tatiana Bautzer and Gram Slattery; Editing by 
Jason Neely and Bill Trott) 
 ((gram.slattery@thomsonreuters.com;)(+55 11 5644 7714)) 
 
Keywords: CARLYLE GROUP BRAZIL/IPO