Itaú buys stake in Avenue and seals agreement to acquire control
First stage of the acquisition involves the purchase of 35% of Avenue for R$493 million; bank expects to increase its offer of investment services and products
O Itaú (ITUB4) announced that it will buy 35% of the share capital of Avenue Holding through an initial contribution of R$160 million and secondary acquisition of shares, totaling R$493 million. The agreement also provides for the acquisition of an additional 15.1% of the shares after two years from the closing date of the first deal, which will give Itaú control of the company.
The amount of the remaining 15.1% was pre-defined based on an undisclosed revenue multiple in a material fact disclosed by Itaú on the morning of this Friday, 8th. Itaú also informed that it may exercise the option to purchase the remaining interest in the business five years after the closing of the first stage.
Created four years ago to meet the desire of Brazilians to invest in the United States, the platform has become one of the main avenues for direct investments abroad. There are 229,000 active customers, 492,000 enabled accounts and R$6.4 billion in custody.
Why did Itaú buy Avenue?
The purchase of Avenue, according to Itaú, aims to reinforce the offer of investment products and services for each client profile.
“We are constantly building and improving our ecosystem, fully thought out together with our clients, based on their needs and focusing on their entire investment journey. The participation in Avenue represents the next strategic step”, said Carlos Constantini, responsible for Itaú’s Wealth Management Services area, in a statement.
With Avenue at home, Itaú hopes to expand its customers’ access to the international market and facilitate the opening of an account abroad. Despite the potential synergies of the business, Itaú stated that the management and conduct of Avenue’s business will remain autonomous.
“From this deal, even more Brazilians will be able to access the largest and most complete market in the world in an easy and simple way. Over the next few years, we expect this market to multiply many times over,” said Roberto Lee, Founder and CEO of Avenue, in a statement. “Avenue and Itaú together combine all the conditions to catalyze and lead this category.”