Advent to acquire 50% of Brazilian port terminal

Advent’s first infrastructure investment in Brazil is also its largest investment in the country, according to a senior executive. The private equity firm plans to invest more in Brazil, where it sees a ‘bottleneck’ of infrastructure needs, but is unlikely to raise an infrastructure-specific fund.

Private equity firm Advent International has agreed to acquire half of Terminal de Contêineres de Paranaguá, the third-largest container port terminal in Brazil, for an undisclosed amount. 

“It is the largest transaction that we have done in Brazil,” said Luiz Antonio Alves, a Brazil-based managing director at Advent.

Advent has made over a dozen previous investments in Brazil, according to its website.  These include a R$280 million (€124.6 million; $166 million) investment in education company Kroton Educacional in 2009 as well as a the purchase of a 30 percent stake in CETIP, a financial services provider, for R$360 million in that same year.

Port of Paranguá: welcomes
new private owner

The port terminal deal, however, is Advent’s first infrastructure investment in the country, Alves said.

Concessions for the terminal were first negotiated by private operators in 1998 and run until 2048, according to Alves. Though Advent will now own 50 percent of the terminal concession, the private operators will retain ownership positions, according to a statement.

Alves said the port has reached capacity, so Advent plans to construct an extra berth and acquire new equipment to accommodate more container volume. The berth will expand the terminal’s container capacity by about 70 percent, from 675,000 to 1.2 million twenty-foot equivalent containers per year, according to the statement.  

Alves said the investment came out of Advent’s Latin American Private Equity Fund IV, which closed on $1.3 billion in 2007, and Latin American Private Equity Fund V, which closed on $1.65 billion in 2010. He said this was the first investment for Fund V.

Advent is “absolutely” considering more infrastructure investments in Brazil, Alves said, because the country faces a “bottleneck” of infrastructure needs that can be met with the help of private capital.

“The government itself does not have the resources to grow the infrastructure supply in tandem with the demand for the products,” Alves said. “The demand for infrastructure services will require a lot of capital in the future.”

He added that Advent is not likely to raise an infrastructure-specific fund and will instead continue to invest in the sector out of its private equity funds.

Boston-based Advent is a private equity firm specializing in buyout investments.