Yahoo Finance Vinci Partners (VINP) to Buy Compass, Expand in Latin America
Vinci Partners Investments Ltd. VINP has inked a deal to buy Compass Group LLC to redefine the investment landscape in Latin America. The transaction is set to close in the third quarter of 2024, pending regulatory approvals.
Shares of VINP jumped 5% on Nasdaq in response to this announcement.
With this acquisition, Brazil-based Vinci Partners will solidify its position as a key player in the Latin American investment landscape, boasting more than $50 billion in assets under management (AUM) across private markets, investment products and solutions, public equities and corporate advisory segments.
This move is in line with VINP's long-term strategic growth plan, presented at its Investor Day, aiming to expand its footprint into Latin America, a region ripe with opportunities in the alternatives market.
Compass brings to the table a wealth of experience, with a history dating back to 1995 and a team of more than 300 professionals. Its presence spans seven Latin American countries, as well as the U.S. and the U.K. With $37 billion in AUM and advisory, the firm has established itself as a pioneer in providing investment solutions across traditional and global alternative assets to a diverse client base.
By joining forces, Vinci Partners and Compass will create a true pan-regional platform, leveraging each other's strengths to offer unparalleled access to a comprehensive suite of alternative investments. VINP will benefit from Compass's established distribution network and track record in the region, while Compass gains access to Vinci Partner's diverse set of alternative investment opportunities in Brazil.
Under the terms of the agreement, the transaction will involve a total upfront consideration of approximately 11.7 million shares of VINP Class A common stock, along with a cash consideration of $31.3 million in the form of VINP Class C redeemable common stock. Further, Compass partners stand to earn an additional up to 7.5% stake in the combined entity, subject to the achievement of predefined metrics, to be paid in VINP Class A common stock until 2028.
Upon completion of the transaction, Manuel Balbontín and Jaime de la Barra, founders and key figures at Compass, will join VINP’s board of directors, further strengthening the collaboration. Also, Compass executives and senior management will continue in their current roles, ensuring continuity and a seamless transition for clients and stakeholders.
This acquisition marks a transformative moment for Vinci Partners, positioning the company as the gateway to alternative investments in Latin America. The combined entity will be well-equipped to meet the evolving needs of investors across the region, offering innovative solutions and driving sustainable growth going forward.
Last year, Vinci Partners and Ares Management Corporation ARES announced the formation of a strategic partnership, wherein the latter will invest $100 million in new convertible preferred shares to be issued by VINP. The move aims to hasten the growth of Vinci Partner’s platform in Latin America.
Further, ARES and VIPN will collaborate on strategic distribution, new product development and other business opportunities.
Shares of VINP have jumped 29.3% over the past year, outperforming the industry’s rally of 23.6%.
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Currently, Vinci Partners carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Last week, BlackRock BLK announced an agreement to acquire the remaining 75% equity interest in SpiderRock Advisors, which offers customized option overlay strategies in the U.S. wealth market. This transaction, expected to close in the second quarter of 2024, reinforces BLK’s commitment to personalized, separately managed accounts (SMAs).
The deal complements BLK’s acquisition of Aperio in 2021 and further strengthens its leadership position in SMAs.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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