Paul Hastings Guides Brazil's PagSeguro Through $653M NYSE Offering
The follow-on comes from the hot fintech sector as Brazil equity deals reach a 10-year high.
October 17, 2019 at 04:45 PM
2 minute read
Photo by Matt Furman
Paul Hastings is guiding Brazilian financial technology firm PagSeguro Digital Ltd. through a $653 million follow-on public offering on the New York Stock Exchange.
The offering is one of the biggest to come out of Latin America's largest economy this year, as equity deals hit a decade-high in Brazil.
The follow-on, which is expected to close on October 21, raises PagSeguro's free float to 54.7%. Underwriters have an additional 30-day option to purchase up to 2.5 million shares from PagSeguro parent company Universo Online (UOL).
Paul Hastings partners David Flechner and Jon Kellner, based in São Paulo, represent PagSeguro on the offering and related corporate matters, with assistance on tax matters from partner David Makso in New York.
Goldman Sachs and Morgan Stanley are acting as global coordinators and representatives of the underwriters; Davis Polk & Wardwell partner Manuel Garciadiaz is advising the underwriters.
The deal taps into a white-hot sector in Latin America: fintech.
PagSeguro says its mission is "to disrupt and democratise financial services in Brazil, a concentrated, under-penetrated and high-interest rate market, by providing an end-to-end digital banking ecosystem that is safe, affordable, simple and mobile-first for both merchants and consumers".
Brazilians are migrating to digital banking platforms at a dizzying rate, prompting conventional financial institutions to shutter hundreds of bricks-and-mortar branches in recent years.
PagSeguro offers digital accounts similar to a regular checking account linked to the Brazilian central bank's platform. These digital accounts are able to accept and issue payments, while offering merchants point-of-sale devices to collect payments from customers in person.
More broadly, progress on macroeconomic reforms under market-friendly President Jair Bolsonaro, combined with signs of economic recovery after a lengthy recession, are stoking demand for Brazilian assets.
Brazilian companies raised $17.1 billion via 34 transactions during the first nine months of 2019 – almost triple the amount of the previous-year period, according to data from Reuters. This year's nine-month total for money raised through share offerings, the agency said, exceeds the full-year amount for every year since 2010.
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