The consortium’s IPO: Ademicon could possibly be the primary administrator at B3
- October 15, 2022
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Company discusses with banks the possibility of listing next year; estimated valuation in the region of BRL 3 billion
Consortium manager Ademicon has been in talks with banks in recent weeks about a potential IPO syndicate, Pipeline has learned. The banks’ proposal is to try to list on B3 in early 2023, taking advantage of the company’s strong growth sequence.
Led by Tatiana Schuchovsky – the CEO who is described in the market as a “machine” of efficiency and expansion, and passionate about consortia – Ademicon has grown at an average of 45% per year. The company should close the year with a profit of almost R$ 180 million.
The estimate of two banks is that, on the stock exchange, the company would be traded at insurance multiples – in the range of 10 to 15x profit. This would give Ademicon a potential valuation of between BRL 1.8 billion and BRL 2.7 billion. But there are other institutions that assess that managers and platforms such as XP Investimentos, Vinci or Pátria are a more “fair” comparison for the business model – since revenue is the flow of fees, in a service profile, and not balance sheet heavy as an insurer. From this perspective, the multiple ranges from 20 to 25x, at a valuation of BRL 3.2 billion to BRL 4.5 billion.
Sought by Pipeline, Tatiana stated that there is still no decision taken on an IPO or contracted union, and that the strategic paths are still being defined. “There are talks with the banks, but it’s too early to say whether or not we’re going down that path,” she said.
The company had as a goal to sell R$ 10 billion in letter of credit this year and should reach R$ 12 billion, according to the businesswoman, and a projection of R$ 15 billion next year. “We are not in a hurry because we do not need cash. Our flow is 20 years. The more we grow, the better this future flow of receivables and consequently the value of the company, so it may make sense to wait longer”, she explains.
The company has its origins in Ademilar, founded by Tatiana’s father, Raul Schuchovsky, now chairman of the board of Ademicon. In 2020, Ademilar merged with Conseg and underwent a rebranding, including a strong investment in marketing. Private equity Treecorp, which was a partner at Conseg, entered Ademicon’s cap table as a minority shareholder.
Like insurance companies, the consortium business has a high ROE. If on the one hand it grows a lot and is a strong cash generator, some banks see a potential challenge in the operation given the sector in which it operates, historically stigmatized in the financial market when treated as an investment, despite recent advances in the sales concept and in the improvement of consumer satisfaction indices.
Ademicon is currently the largest independent consortium administrator in Brazil in terms of active credits, with almost R$50 billion, and also operates under the “Consortium as a Service” model. “Our model is different because we distribute the consortia in stores, with brand licensing”, explains Tatiana.
The CEO of the company from Paraná is a strong supporter of the consortium as financial planning. “Of 10 family problems, eight could be solved with a consortium. It is the need for the house, the car, even in vitro fertilization is possible with the consortium”, she says.
Source: Value Pipeline