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Carlyle acquires majority stake in CVC Turismo

Guillermo Parra-Bernal and Gunna Dickson  Jan 08, 2010

SAO PAULO - U.S.-based buyout firm Carlyle Group bought 63.6 percent of CVC Turismo, Brazil's largest tourism agency, for an undisclosed amount, as the private equity firm casts about for deals in fast-growing emerging market economies.

Santo Andre, Brazil-based-based CVC, majority owned by entrepreneur Guilherme Paulus, has grown into Latin America's largest tourism and travel agency after an economic boom added more than 25 million clients over the past five years, the companies said in a joint statement.

Buyout giants are looking for deals in emerging market economies like Brazil, where the impact of the global recession was minimized by consumer spending and other factors. Private equity firms have struggled in developed economies during the past two years.

Brazilian analysts expect private equity investment to soar next year as the country's growth prospects and declining interest rates draw a new class of investors.

"CVC is quickly benefiting from the expansion of Brazil's middle class," the statement noted. "In the middle term, CVC will continue to prioritize the Brazilian market, whose economy is the world's tenth largest, and should expand at rates above 5 percent in 2010."

In the statement, both companies acknowledged that tourism will blossom, thanks to the 2014 World Cup and the 2016 Olympics that Brazil will host.

Terms of the deal, including the value of the transaction and management retention packages, were not disclosed. Paulus will remain as chairman of CVC. Airline WebJet and GJP Hoteis e Resorts hotel chain are not part of the deal, the statement added.

Carlyle's New York-based group that oversees investments in retail and consumer goods companies will support the private equity firm's local offices in Brazil to help run CVC, the statement added.

A source familiar with the transaction said that Carlyle would be paying close to $250 million for a 60 percent stake in CVC. Calls made to a Carlyle spokesman in Washington D.C. seeking comment were not immediately returned.

Carlyle acquires majority stake in CVC Turismo
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