Private equity firm The Carlyle Group has acquired Brazilian tour operator CVC Brasil Operadora e Agência de Viagens from founder and chairman Guilherme Paulus.
Paulus will remain chairman of CVC and will retain a significant minority equity stake in the company.
CVC is headquartered in Santo André, Brazil and is the largest tour operator in Latin America.
The transaction closed in late December 2009 and included the tour operator and the cruise ship businesses of CVC. The other companies controlled by Paulus – the airline WebJet, the hotel management company GJP and the advertising agency GP7 – were not included. Carlyle has acquired a 63.6 per cent stake in CVC. Additional financial terms of the transaction were not disclosed.
Founded in 1972 by Paulus, CVC packages charter flights, commercial flights, cruises, hotels and receptive services into vacation packages, which it sells to more than two million passengers per year. A broad assortment of tour packages to both domestic and international destinations are sold through more than 400 retail stores, which are mostly franchised, and through approximately 8,000 independent travel agents. CVC has more than 900 employees and generates more than 4,500 indirect jobs.
In Brazil the addressable market for tour packages has grown by approximately 25 million people over the past five years.
Valter Patriani, chief executive officer of CVC, says: “Many of Brazil’s consumers are just discovering that vacationing via airplane is an affordable alternative. CVC’s broad product offering and affordable pricing have opened up a new way of life for many consumers.”
In the medium-term, CVC will continue focusing on the Brazilian market, already the tenth largest economy in the world with expected GDP growth of five per cent in 2010. Brazil’s tourism sector is expected to benefit from increased travel demand and heavy infrastructure investments as the country prepares to host the 2014 FIFA World Cup and the 2016 Summer Olympics. In the long-term, CVC may seek to expand into other South American markets.
Fernando Borges, Carlyle managing director and head of Carlyle’s South America buyouts team, says: “We are pleased to make our first buyout investment in Brazil. CVC is a top company led by a talented chief executive, Valter Patriani, and his management team, who have an outstanding track record and a clear strategy for long-term growth. Carlyle’s Brazil team and its New York-based consumer and retail group will support CVC’s continued growth strategy, and we expect that CVC’s valued customers and talented employees will benefit as CVC continues to increase the breadth and value of its industry-leading tour package offerings.”
Equity capital for this transaction will come from Carlyle Partners V (Carlyle’s flagship USD13.7bn US buyout fund), Carlyle’s South America buyout fund, Paulus and other co-investors including RLJ Equity Partners.
