S&P Capital IQ Report Spotlights Improved Value in Brazilian Privately Held Firms

New Investment research indicates significant valuation growth of private sector companies

Jul 07, 2015, 15:20 ET from S&P Capital IQ

NEW YORK, July 7, 2015 /PRNewswire/ -- A new report from S&P Capital IQ, a global provider of financial research, data and analytics, suggests that, while Brazilian public company valuations have deteriorated over the last two years, there are bright spots that suggest potential investment opportunities among private companies, especially within a few key sectors.  Among these are Consumer Discretionary and Healthcare, areas which are heavily consumer driven and which appear to be key drivers of current and future economic activity in the country. A copy of Opportunities For Long-Term Investment In Brazil may be obtained by clicking here.

"Our analysis of private company valuations in Brazil indicates that this sector, now worth over $1 Trillion USD, can and should be an important engine for growth in the country's economic recovery," said Thomas Yagel, Vice President, S&P Capital IQ. "Not only is their value larger than all of Brazil's publicly traded companies, but their valuation multiples over the past two years have expanded, while public ones contracted. Clearly, Brazil will look to all potential sources for economic success, including government spending, outside investments, and internal capital markets.  However these institutions will likely not be able to get the job done alone.  Private companies will likely be a critical part in the overall solution."

"These research studies are examples of the powerful insight created into Brazilian public and private company performance and valuations when market participants have access to the extensive financial data S&P Capital IQ provides," said Cynthia Rojas Sejas, Vice President, S&P Capital IQ. "This research is made possible by our new standardized financials on unlisted Brazilian companies in combination with our global data and analytics—something we believe investors, deal makers and risk managers can use to uncover opportunities and help manage risk in Brazil and across Latin America."

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!)

The S&P Capital IQ platform includes global coverage on over 3.5 million public and private companies, making it easier to obtain and analyze information about private and public companies in Brazil and globally. In-depth analysis with easy company screening, sector and peer analysis, tailored comparisons, and up-to-date financial information is now available for thousands of Brazilian companies in a wide variety of economic sectors. The robust 'click-through' functionality on the S&P Capital IQ platform allows for full transparency into the calculation of financial metrics and enables tracing of values to source documents.  A copy of S&P Capital IQ's earlier Brazil study, Current State of Affairs, which compares key metrics of privately owned and publicly traded companies, may be obtained by clicking here.

About S&P Capital IQ

S&P Capital IQ, a business unit of McGraw Hill Financial (NYSE: MHFI), is a leading provider of multi-asset class and real time data, research and analytics to institutional investors, such as investment and commercial banks, investment advisors and wealth managers, and corporations and universities around the world. S&P Capital IQ provides a broad suite of capabilities designed to help track performance, generate alpha, and identify new trading and investment ideas, and perform risk analysis and mitigation strategies. Through leading desktop solutions such as the S&P Capital IQ, Global Credit Portal and MarketScope Advisor platforms; enterprise solutions such as Standard & Poor's Securities Evaluations; and research offerings, including Leveraged Commentary and Data, Global Market Intelligence, and company and fund research, S&P Capital IQ sharpens financial intelligence into the wisdom today's investors need. For more information, visit www.spcapitaliq.com.