Siguler Guff invests BRL 150 million in Verzani & Sandrini

Siguler Guff invests BRL 150 million in Verzani & Sandrini

Siguler Guff — the American private equity manager — is investing BRL 150 million in Verzani & Sandrini, the second largest player in Brazil in outsourced cleaning, security and maintenance services, second only to GPS.

The round is the third in the history of Verzani & Sandrini, founded in 1967 in the ABC Paulista region by the two families that lend it its name.

After spending decades growing organically, the company raised capital with NEO Investimentos in 2017 to start making acquisitions. In 2020, Kinea Investimentos also entered the cap tablegiving more gas to the strategy.

Since then, Verzani & Sandrini has made 12 acquisitions, entering new geographies and adding R$1.3 billion in revenue. Today, the company serves 1,300 companies with 63,000 employees throughout Brazil.

Today’s round — 100% primary — will allow the company to double down on this aggressive M&As strategy.

CEO Fabio Sandrini told Brazil Journal that the company has a robust pipeline of potential targets and plans to make “at least” four more acquisitions next year.

The company is closing the year with revenue of R$3.3 billion, a growth of 24%, and EBITDA of R$220 million. The goal is to increase revenue to R$4 billion and EBITDA to R$300 million next year.

Verzani & Sandrini is trying to consolidate an extremely fragmented market: there are over 100,000 outsourcing companies in Brazil, and the two largest account for less than 8% of the market (GPS has a share 5% and Verzani & Sandrini, 2.5%).

“It’s a very big space for consolidation,” said Cesar Collier, managing director of Siguler Guff in Brazil. “In the United States, the two largest companies in this sector already have about 40% of the market.”

According to him, another point that attracted the manager was the resilience of the outsourced services sector, which has been growing at double-digit rates for years, as well as the above-average performance of the company.

“Over the last 20 years they have managed to grow at a CAGR of over 20%,” he said.

According to Fábio, the company manages to grow even in times of negative GDP because it operates in an essential activity.

“A hospital or an industry is unlikely to be without cleanliness, without maintenance and without security, because they cannot operate without it,” said the CEO. “Obviously, in times of crisis there is greater pressure from the market in relation to costs, but hardly any customer cuts the contract.”

According to him, the churn by Verzani & Sandrini is less than 3% today.

Siguler Guff’s contribution comes a year after Verzani & Sandrini attempted an IPO. At the end of 2021, the company even made the filing at the CVM, but the market closed.

Fabio said that it is not yet defined when the company should try to open the capital again, but that the plan remains. “As we have funds that will have to come out at some point, we should look for the IPO again.”

Source: Brazil Journal

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