Infracommerce tries to leave the astral hell behind
Infracommerce completed its first year as a publicly traded company, but in the anniversary combo, astral hell came. When it made its IPO in May last year, raising BRL 870 million, the company founded by German Kai Schoppen did not imagine that the sell-off of technology shares would hit the plans to finance the rapid growth of the business.
Since then, Infracommerce has used a good part of the money raised for M&As, doubling revenue. In the first quarter, the company attracted 55 new clients (almost the same number as the pre-IPO), paving the way to deliver the R$13 billion GMV promised for 2022. But if the speed of execution is praised by analysts when they look at data operational, a yellow light came on regarding capital structure.
The sell side is worried about indebtedness. According to Itaú BBA’s calculations, the leverage ratio hit 3.5 times, above the covenant of 2.5 times, which can trigger the prepayment of around R$250 million in debentures.
The calculations of analysts Carlos Sequeira and Osni Carfi, from BTG Pactual, indicate a potentially delicate situation at the end of the year. Considering leases, Infracommerce’s net debt would already be R$ 249.4 million – above the R$ 142 million on the balance sheet.
In addition, the company needs to honor another BRL 290 million throughout the year in M&A commitments, which would bring the net debt to more than BRL 540 million. Considering an Ebitda of BRL 89 million for 2022, BTG calculates that the leverage ratio would exceed 6 times.
The reflexes are already remarkable. Throughout the year, the company laid off about 100 employees, according to a report by Valor — the company attributed it to acquisition synergies and says it has more than 300 new vacancies open, while internally the matter would have been treated as a budget adjustment. On the stock exchange, the share is now worth almost a quarter of its debut price and there are investors who see an even greater drop. The average number of shares traded per session is 965,900 this year, while 4.1 million are leased.
The company’s management has engaged with shareholders and creditors. To Pipeline, the vice president of investor relations at Infracommerce, Fabio Bortolotti, argues that the scenario is less dramatic than what analysts draw.
“We are going to multiply Ebitda by four this year and double it in 2023”, guarantees Borto, as he is best known in the market. The executive says that the reading that best represents the business should be based on the recurring Ebtida — the run rate —, which should close 2022 running well above R$ 100 million in the calendar year.
Borto recognizes that leverage will be “a little high, but close to 3 times Ebitda”, but minimizes the risk of an early maturity of debts. “It’s a relatively smooth discussion with the banks. It’s not an issue,” he says. “Banks are seeing the growth of Ebitda and our ability to pay.”
In addition, the main part of the debt that Infracommerce must honor in 2022 refers to a payment of R$200 million for the acquisition of Synapcom, a R$1.2 billion M&A made with cash (R$710 million) and shares. . Management counts on the possibility that the former owners of the company — and current partners of Infracommerce, therefore — agree to postpone the M&A portion. If they do, the company can avoid triggering the R$350 million credit line it already has with banks.
The heightened financial strain raised a buzz in the market that the company would seek an equity injection. Management rules out a follow-on, an undertaking that would not be easy given the stock’s level and that also delays the departure of some investors who are planning a secondary tranche.
One alternative that was discussed with potential investors was the issuance of a convertible debenture using the IPO price per share as a reference, but the even sharper fall in the share in recent weeks made the operation difficult.
The company tries to convince with fundamentals, since in the stock market things are difficult. “I was with 15 investors in one morning. In this moment of tech, it is difficult for an investor to buy in”, acknowledged the executive. The exception is the investment firm Compass Group, which increased its position, passing 10% of the company’s capital.
Source: Value Pipeline