Reports have it that Patria Investments (PAX) has filed to raise $400 million from the sale of its Class A stock in an initial public offering. The Latin American firm has become increasingly popular for providing alternative investments in the region.
The Cayman Islands-based firm was founded with the primary goal of providing investors across the globe with investment access to institutional equity investments in the region.
Headed by co-founder Chairman Olimpio Matarazzo Neto, PAX has deployed over $17 billion between 90 investments and 215 underlying acquisitions as of September 30, 2020. The company also caught the attention of big investors like Patria Holdings and Blackstone PAT Holdings.
The company seeks investment from different categories of limited partners, including sovereign wealth funds, pension funds, insurance companies, funds of funds, financial institutions, endowments, foundations, and family offices. The firm also sources for suitable private companies to invest in through outright acquisition or minority interest purchases.
Patria Investments boasts of a seemingly good balance sheet, with $39.7 million in cash and $39.9 million in total liabilities as of September 30, 2020. Free cash flow during the twelve months ended September 30, 2020, was reported at $53.2 million.
The market looks poised for growth as Brazil recently introduced investor-friendly policies as well as lower interest rates and a pension reform program to attract more FDIs.
Patria Investments’ IPO will reportedly offer 16.65 million shares of Class A stock. Blackstone PAT Holdings will also sell 10 million shares at a midpoint price of $15.00 per share to generate gross proceeds of approximately $400 million. However, none of the existing shareholders have shown any interest in buying shares at the offering price.
After completion of the IPO, holders of Class A stocks will be eligible for one vote per share while Class B stakeholders enjoy 10 votes per share. In a similar vein, Class B stakeholders will be ‘entitled to pre-emptive rights in the event that additional Class A common shares are issued in order to maintain their proportional ownership interest.’
The completion of the initial public offering at the midpoint of the proposed price range will put the company’s enterprise value at IPO at approximately $1.96 billion. The move will also put the float to outstanding shares ratio at about 19.94%, excluding effects of underwriter options and private placement shares or restricted stock.
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