Votorantim Cimentos Files for $5.4 Billion IPO

Brazil’s largest cement producer, Votorantim Cimentos S.A., filed a $5.4 billion maximum proposed initial public offering with the U.S. Securities and Exchange Commission (SEC) on April 17. The company plans to dual list on the NYSE and São Paulo Stock Exchange to raise funds to finance expansion, portfolio diversification and reduce debt. A request was filed with the Brazilian Securities Commission (CVM) on April 9.

Specific to North American acquisition or investment opportunities, the prospectus notes, “We will select companies or assets with potential to improve their operating and financial performances and generate synergies with our existing clusters.” In the U.S. and Canada, a publicly traded Votorantim Cimentos would “focus efforts on maximizing the benefits from expected market recovery, and expect to further improve the utilization rates of our [cement] plants as higher sales volume reduce our fixed costs per ton sold.”

Votorantim Cimentos will sell shares via a primary offering, with the proceeds going into the company’s treasury, along with a secondary offering of shares held by its parent company, Votorantim Industrial, who would also maintain majority shareholder status. Units may be offered directly or in the form of American depositary shares, each of which represents one unit. Each unit represents one common share and two preferred shares of Votorantim Cimentos.

Morgan Stanley, J.P. Morgan, Itaú BBA, BTG Pactual and Credit Suisse were listed as the joint bookrunners on the deal. No pricing terms were disclosed.

The São Paulo -based Votorantim Cimentos is the largest and most profitable heavy building materials company in Brazil, the fourth-largest cement market in the world. The company operates in Brazil, U.S., Canada, Bolivia, Chile, Argentina, Uruguay, Paraguay, Portugal and Peru. Votorantim Cimentos sales in 2012 were $4.6 billion, an increase of 9 percent over 2011 figures. Adjusted EBITDA increased 11 percent to $1.5 billion over the same period.

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