Patria Investments Announces Divestment of Delly’s from Private Equity Fund V through a Transaction with CVC Capital Partners Fund VIII and Patria’s Private Equity Fund VII.
Delly’s is a Brazilian market leader and proven winner in Patria’s Private Equity portfolio, and this transaction will deliver attractive returns to current investors, while positioning CVC Capital Partners and Patria’s newest vintage fund in co-control for the new growth cycle ahead.
Grand Cayman, Cayman Islands, June 21, 2023 – Patria Investments Limited (“Patria”) (NASDAQ: PAX), a global alternative asset manager and a leading private equity investor in Latin America, announced a definitive agreement for the sale of Delly’s, a leading food service distribution company in Brazil, and the third largest holding in Patria’s Private Equity Fund V portfolio. The transaction represents a full divestment from Private Equity Fund to funds advised by CVC Capital Partners (“CVC”), a leading global alternative investment manager, and Patria’s Private Equity Fund VII.
Together Patria, CVC and Delly’s existing management team will lead Delly’s into its next phase of growth, aiming to create one of the largest food distribution companies in South America, expanding on Delly’s successful track record.
Delly’s has grown from 1% market share at the time of Patria’s initial investment in 2015 to 11% in 2022, following a buy-and-build consolidation strategy in a fragmented market which had more than 400 players. The consolidation strategy, together with Patria’s intense hands-on operational approach, delivered consistent and robust operational growth of 67% Net Revenue CAGR and 60% EBITDA CAGR from 2015 to 2022.
“Delly’s is a great example of diligent execution across each pillar of Patria’s investment approach, including sector selection, consolidation strategy and operational value creation”, said Ricardo Scavazza, Managing Partner and CEO of Private Equity at Patria. “We are very pleased to complete this chapter of growth into a market leader in Brazil and return capital for Private Equity Fund V, and also excited to partner with CVC to further expand Delly’s into a leading regional player.”
We are delighted to have agreed to invest in the business, alongside Patria Investments and in partnership with the management team. CVC has a deep history and success in investing in the food value chain and in distribution business globally and we look forward to bringing this expertise on board to help support Delly’s long-term value creation strategy and continued success.Fernando Pinto
Fernando Pinto, Partner and Head of Latin America at CVC, said: “We have been impressed by Delly’s compelling position across categories and a number of key markets, as well as its clear potential for growth. We are delighted to have agreed to invest in the business, alongside Patria Investments and in partnership with the management team. CVC has a deep history and success in investing in the food value chain and in distribution business globally and we look forward to bringing this expertise on board to help support Delly’s long-term value creation strategy and continued success."
Delly’s CEO Alessandro Chiaramitara said: “We are proud to have the trust of CVC and continued trust of Patria for our growth strategy and we value their support and partnership, as we look to build the largest food service distributor in South America in the coming years.”
Patria’s Private Equity Fund V is a US$1.8 billion 2015 vintage fund which has invested in 9 portfolio companies. Based on valuations as of March 31, 2023, the fund has achieved a gross multiple of invested capital (MOIC) of 2.3x and a net IRR of 17%, resulting in $212 million of Net Accrued Performance Fees. Together with previous divestments, the sale of Delly’s, which was in line with its most recent quarterly valuation mark, results in nearly US$600 million of cumulative proceeds secured for Fund V investors.
Over the last twelve months, Patria has now secured proceeds of nearly US$2.2 billion for fund investors through divestments in both Private Equity Fund V and Infrastructure Fund III, reflecting great progress in the divestment phase of these funds.