Cosan has decided to postpone the IPO of Moove on the New York Stock Exchange after several international long-only funds backed out of the offer, not wanting to increase their exposure to Brazil, sources familiar with the matter told the Brazil Journal.
Meetings with investors last week were constructive – the order book was over 2x covered over the weekend, but dominated by hedge funds – and the company expected to price the transaction early this afternoon.
But something unusual happened along the way: the investment committees of long-only funds – which are necessary to create a quality shareholder base, allowing the stock to trade up – vetoed an increase in their exposure to Brazil.
Of the approximately 30 funds initially interested, only 3 confirmed their orders.
During the roadshow, some cited the unpredictability of the country’s currency – which has the potential to alter Moove’s results.
Half of the top line and 66% of the company’s EBITDA still come from South America (particularly Brazil) – even though all expected growth in the coming years will come from developed countries.
The IPO failure comes at a time when Brazilians themselves are increasingly complaining about legal uncertainty in the country and amid concerns about the consistency of the fiscal framework under the Lula Government.
The news is likely to further dampen spirits on Faria Lima, where the Stock Exchange cannot get off the ground and the buyside has been suffering constant withdrawals since mid-2021.
For Moove, the IPO was not a capital necessity. The company would only raise $100 million in the primary tranche, and the majority of the funds ($300 million) would come from the secondary offering, providing a partial exit for CVC Capital Partners and Cosan.
The indicative range of the IPO was $14.50 to $17.50 per share. In the middle of the range, this would give a multiple of 8x Moove’s estimated EBITDA for 2025 – a 25% discount compared to global peers like Fuchs and Quaker Houghton.
“We could force the offer to come out below the range, but it wouldn’t be an offer of the quality we want,” said a source involved in the process, who says the company will return to the market later.
Moove wanted to debut on the New York Stock Exchange with a market cap of $10 billion, in the middle of the indicative range. Cosan holds 70% of the capital; the remaining 30% belongs to CVC Capital Partners.
The global coordinators were JP Morgan, Bank of America, and Citi, followed by Itaú BBA, BTG Pactual, and Santander. Goldman Sachs, Jefferies, and Morgan Stanley were also in the syndicate.
Source
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.
