Vero Internet has just raised R$ 900 million with a debenture that will refinance short-term debts and accelerate the expansion of the ISP to new cities and capitals, where the company aims to challenge telecom giants.

The fundraising – the second for Vero this year after issuing R$ 600 million in incentive debentures in March – was divided into four series.

The first series, with a 5-year maturity and IPCA + 1.65%, raised R$ 163.3 million, and is the only one that is not incentivized.

The second series, with a 7-year maturity and IPCA + 1.65% (with a limit of 7.65%), raised R$ 259 million.

The third series, with a 7-year maturity (3-year grace period) and CDI + 1.65% (with a limit of 13.65%), raised R$ 208.4 million.

The fourth series, with a 10-year maturity, 4-year grace period, and the same remuneration as the third series, raised R$ 269.3 billion.

CEO Fabiano Ferreira said that the fundraising will help the company increase the average term of its debt from 4.2 years to 5.4 years, as well as reduce its financial expenses by low double digits.

Of the total amount raised, 25% will go towards extending existing debts, and the rest will be used for expansion capex.

Currently, Vero operates in 420 municipalities across nine states, in addition to the Federal District. “We have over 3,000 municipalities to explore just in these states,” Ferreira told Brazil Journal.

After growing only in rural areas, Vero is now taking its first steps in capitals. Last month, it launched in Belo Horizonte and Goiânia.

As these are markets already well occupied by giants like Vivo, TIM, and Claro (and therefore require massive investments in marketing), Vero is first testing the waters: instead of laying its own network, it is leasing the V.tal network, controlled by BTG.

“To lay our own network, it has to be very worthwhile, so we are feeling out this initial presence in the capitals. But the first weeks have been record-breaking for us,” said Ferreira.

According to the executive, the raised funds are sufficient to support organic expansion until the end of 2025, but the company may return to the debt market if M&A opportunities arise.

In July, Vero merged with Americanet, creating an ISP with revenue of R$ 1.7 billion and 1.4 million subscribers, leading the independent ISPs segment along with Aloha Fibra, controlled by eB Capital.

With the merger, Vero now has shareholders such as Vinci Partners, Warburg Pincus, and Invest Tech.

Ferreira said that more discussions are ongoing and new announcements may come next year – but they will be much smaller deals than the one announced with Americanet.

The IPO remains an intention for the near future, but the executive said he is not satisfied with the multiples the sectors are trading at.

While major operators are trading at 5.5x EBITDA, smaller ISPs are at 5x.

“But internationally, companies like ours are valued at multiples above 9x,” Ferreira said.

In the last 12 months ending in June, Vero reported an adjusted EBITDA of R$ 850 million and an EBITDA margin of 52%.

Meanwhile, adjusted EBITDA minus capex was R$ 454 million in the same period – with a margin reaching 17%.

According to the CEO, this is a record number within the sector, and Vero wants to show the market that the company has always had financial discipline.

BTG Pactual was the lead coordinator of the issuance, in a syndicate that also included XP, UBS BB, Santander, Itaú BBA, and ABC Brasil.


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