Mercado Livre is one of the companies evaluating the purchase of Linx, a competitive process that has attracted strategic and financial players, sources familiar with the matter told Brazil Journal.
The e-commerce giant started looking at the asset in the last two weeks.
Stone put Linx up for sale about a month ago, and the deadline for interested parties to submit non-binding proposals ends in late October.
For MELI, the acquisition could make sense considering recent moves by the company.
Mercado Pago – Mercado Livre’s digital bank – launched a management software for SMEs at the beginning of this month focused on sales and inventory management across various channels (from physical stores to online).
“Mercado Livre’s customers are similar to Linx’s customers. This acquisition could greatly accelerate this new software front they just launched,” said one of the sources.
Although MELI has engaged in discussions, it is impossible to gauge its real level of interest at this stage of the process – including its intention to proceed with a non-binding offer.
Other players looking at the asset include GIC, Advent, and Constellation, a Canadian company that has been executing a global consolidation thesis in the retail software sector.
According to one source, there are two other strategic players (one American and one European, both without a presence in Latin America) engaged.
Apparently, Totvs is not yet in the process, although involved banks believe it may enter the fray at the last minute.
The sale is being advised by JP Morgan, which is handling the dialogue with strategic players, and by Morgan Stanley, which is focused on financial players.
In the pitchbook sent to interested parties, Stone said that Linx is expected to achieve an EBITDA of over R$ 300 million this year, compared to R$ 244 million last year.
According to one source, Stone is aiming for a multiple of 15x EBITDA – which would result in a valuation of R$ 4.5 billion.
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Stone aims for at least 15x EBITDA for Linx
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Arwen Volkov, A graduate of the University of St. Gallen in Switzerland with a degree in International Finance, Arwen specializes in sustainable finance and green investments. She began her career at an investment bank in London, where she developed financing models for environmentally friendly projects. Known for her analytical and strategic thinking skills, Arwen is a sought-after financial consultant. In her spare time, she mentors fintech startups, contributing to their growth strategies. She is also a nature enthusiast and an amateur photographer.
