Carlyle Group acquires Brazilian tour operator CVC
Friday, January 8, 2010
The Carlyle Group said Thursday that it has acquired a major stake in a cruise ship and tour operating company in Brazil, a move that marks its first buyout investment in that country and further expands its overseas operations.
The District-based private equity giant paid $250 million for a 63.6 percent stake in CVC Brasil Operadora e Agência de Viagens, according to a source familiar with the transaction who was not authorized to speak about the finances of the deal. CVC's chairman, Guilherme Paulus, will retain a significant minority equity stake in the company.
Founded in 1972, CVC is headquartered in Santo André, Brazil. It is the largest tour operator in Latin America with 900 employees selling travel packages to more than 2 million passengers a year.
The bulk of the money for the deal came from Carlyle Partners V, a $13.7 billion U.S. buyout fund. The rest came from Carlyle's South America fund, Paulus and RLJ Equity Partners head Robert L. Johnson, plus other co-investors.
Carlyle, which holds a stake in RLJ, has worked to expand its business over the last five years in places such as Mexico, South America, the Middle East, Southeast Asia and North Africa.
Johnson, who is the lead owner of the Charlotte Bobcats professional basketball team and several Marriott brand hotels, moved out of the Washington area and now resides full time in Palm Beach, Fla., where he's working on a venture to bring video gambling machines to the Caribbean and Latin America.
Sandra J. Horbach, Carlyle's managing director and head of its consumer and retail team, said the new deal in Brazil is attractive because the country is "a large and growing consumer market with favorable demographics."
"We expect that growth to be bolstered by significant investment in the Brazilian tourism industry and infrastructure in preparation for the World Cup and Olympics," which are coming to Brazil in 2014 and 2016, respectively.