The total market capitalization of publicly listed companies in Brazil is currently three quarters of a trillion US dollars, ranking 15th in size globally. Private companies in the country have a combined value that well exceeds that public company number. That brings the total valuation of public and private companies to almost two trillion dollars. This paper will explore key issues around drivers of the Brazilian economy and focus in on the impact and trends for private companies.
Some key findings S&P Capital IQ’s Brazil report reveal:
- Highest Equity Value to Revenue multiples are in Energy (3.0), Utilities (2.7), Consumer Discretionary (2.1) and Healthcare (1.9) sectors for Latin American peer group.
- Two year transaction multiple trends for Energy actually declined (-32%), while Utilities (+467%), Consumer Discretionary (+116%), and Healthcare (+80%) all increased significantly, along with Industrials (+97%).
- Largest Control premiums were in Consumer Discretionary (216%), Energy (170%), Industrials (120%), Utilities (81%) and Healthcare (9%) as measured by percent difference in transaction versus trading multiples.
- Adding these three key drivers up shows Utilities, Consumer Discretionary and Healthcare winning in all categories. Because the report finds a few related transactions skewing the Utilities numbers, our research identifies Consumer Discretionary and Healthcare as poised for opportunity (with Industrials is a strong contender as well!)