IG4 Capital and Alberta Investment Management Corporation $107 Million investment in Iguá Saneamento S.A.


Pinheiro Neto advised on the deal

IG4 Capital, a Brazilian private equity firm, and Alberta Investment Management Corporation (AIMCo), on behalf of certain of its clients, have entered into an investment agreement that will result in a primary investment of R$400 million in FIP Iguá, the controlling shareholder of Iguá Saneamento S.A.. Proceeds of the investment will be used to continue its investment program in its 18 existing concessions and public-private partnerships and to grow the company by pursuing new concession opportunities in the Brazilian water and sewage sector. The transaction is expected to close within 50 days subject to customary closing conditions.

The investment agreement comes one year after IG4 Capital established FIP Iguá to manage Iguá Saneamento S.A., formerly CAB Ambiental. IG4 Capital will continue to be the controlling shareholder of FIP Iguá.

Iguá Saneamento is a water and sewage service holding company with operations in 18 locations in five Brazilian States, including public concessions and public-private partnerships providing sanitation services for approximately 6.6 million people. FIP Iguá holds an 84.2% stake in Iguá Saneamento, while BNDES Participações S.A. holds the remaining 15.8% of the company.

Since IG4 Capital assumed control, Iguá Saneamento has demonstrated consistently positive results, recording a profit of R$30.2 million in 2017, reversing a net loss of R$83.8 million in the previous year. 2017 results represented an improvement of 136% in a financial and operational restructuring year for the company. The restructuring resulted in an increase of 20.9% of adjusted EBITDA, which increased from R$175.4 million to R$212 million, with the EBITDA margin increasing from 34.5% to 39%.

Pinheiro Neto advised IG4 Capital, FIP Iguá and Iguá Saneamento S.A. with Eduardo Paoliello Jr (Picture) Caio Cruz Ferreira Silva, Cauê Razende Myanaki, Mariana A. Tomazelli Bassoli, Felipe Tucunduva Heemstede, Antonio Siqueira Filho and Felipe Rassi.

Involved fees earner: Eduardo Paoliello Jr. – Pinheiro Neto; Caue Rezende Myanaki – Pinheiro Neto; Mariana Alonso Tomazelli Bassoli – Pinheiro Neto; Felipe Tucunduva Van Den Berch Van Heemstede – Pinheiro Neto; Antonio de Paula Siqueira Filho – Pinheiro Neto; Felipe Rassi – Pinheiro Neto; Caio Ferreira Silva – Pinheiro Neto;

Law Firms: Pinheiro Neto;

Clients: IG4 Capital; Iguá Saneamento S.A.;

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Author: Ambrogio Visconti.