New York-based private equity house Carlyle Group has paid hundreds of millions of dollars for a majority stake in Brazilian vertically integrated tour operator CVC.
Investors buy Latin America’s biggest tour operator
New York-based private equity house Carlyle Group has paid hundreds of millions of dollars for a majority stake in Brazilian vertically integrated tour operator CVC. The investment is a first for the VC giant in Latin America. It has bought a 63.6% stake for an undisclosed sum although some Brazilian financial wires reported a $400m price tag. Other observers suggest $250m. CVC carried two million passengers in 2009, a 20% increase on 2008. It was founded in 1972 and operates using the traditional vertically integrated model, combining tour operating with retailing. It has 400 of its own shops in Brazil run through franchises and also works with 8000 independent agents. It also owns a low-cost airline, Webjet, which is not part of the Carlyle deal. Founder Guilherme Paulus will stay on as chairman. Carlyle said that “CVC is well positioned to sell its affordable travel packages to Brazilian consumers, particularly given CVC’s ability to offer attractive payment terms and to assist first-time travellers with the nuances of air travel”. It added that the 2014 FIFA World Cup and 2016 Olympics would also benefit the business by improving the tourism infrastructure within Brazil. In the long-term Carlyle will consider expanding into other South American markets.
