* Brazil-based Ita ? BBA included in Facebook IPO
* Move underscores growing clout of Brazil banks
* Brazil No. 2 in active Facebook users
By Guillermo Parra-Bernal and Olivia Oran
SAO PAULO/NEW YORK, May 11 (Reuters) – For most people,
Facebook is a way to connect with friends and family all over
the globe. For Brazilian investment bank Ita ? BBA, Facebook
could help it forge connections with the elite banks that handle
the world’s biggest financial deals.
Ita ? BBA last week won a coveted role on Facebook Inc’s
IPO advisory team, becoming one of 33 banks that will
underwrite one of the most eagerly awaited stock market debuts
ever.
The deal gives the S GBPo Paulo-based firm more global
visibility and reflects increased confidence in Brazil and its
capital markets, even as risk-taking wanes in the face of a weak
global economic recovery.
For Facebook, a relationship with Ita ? BBA can do more than
line up Latin American buyers for its $10.6 billion initial
public offering – the bank can also help spot potential takeover
targets in Brazil, which trails only the U.S. in terms of active
Facebook users. In recent months, venture capital funds have
poured money into a range of Brazilian startups, from travel
site ViajaNet to online auto parts retailer Connectparts.
Ita ? BBA’s parent company, Ita ? Unibanco, is
Brazil’s top private sector lender and a leading money manager
for the rich in the region.
“It is a bank that’s modeled on the most traditional houses,
that has been able to direct investment towards Brazil’s
fastest-growing sectors. They have presented themselves to
foreign investors as the benchmark vehicle to bet on Brazil,”
said Jos (c) Gonz ¡les, managing director at money manager SG Asset
Management.
“Facebook sees itself as a global company. This is the
moment for them to build relations in places where they see
growth, like Brazil,” said Gonz ¡les, a former dealmaker for ING
Bank and Japan’s Nomura. “It’s a smart move.”
Facebook users in Brazil nearly tripled to reach 36 million
last year, putting it ahead of Google Inc’s Orkut
service as the No. 1 social network in the country.
BEATING FOREIGN BANKS
Unlike their counterparts in other emerging markets,
Brazilian banks are besting their foreign rivals at funding
deals, forging stronger client ties and setting up distribution
networks similar to those of global banks.
Ita ? BBA is Brazil’s top adviser for mergers and
acquisitions and bond deals this year, according to Thomson
Reuters data. Goldman Sachs Group, Morgan Stanley & Co
, and JPMorgan Chase & Co — which are lead
managing Facebook’s IPO — ranked 11th, 14th and 17th in
Brazilian M&A; this year, respectively.
As more Brazilian companies go public and tap bond markets,
that is contributing to the increased role of Brazil-based banks
in global investing, said Kevin Kelley, a partner who heads law
firm Gibson, Dunn & Crutcher’s Latin American practice.
In addition to Facebook, Ita ? BBA was co-manager in the $671
million IPO of buyout giant Carlyle Group LP. Bradesco
BBI, the investment-banking unit of Brazil’s No. 2 private
sector bank Banco Bradesco, in January was picked as
co-manager of a sale of five-year debt by the finance unit of
Ford Motor Co.
Ita ? BBA, BTG Pactual and BR Partners, an
investment banking boutique that ranked 5th in Brazil M&A; this
year, participated in 35 out of the 64 deals run by the 10
largest financial advisors.
“Leads are conscious of that, and that’s why they are
courting Ita ? into this secondary role,” a S GBPo Paulo-based
investment banker, who declined to be identified, said of
Facebook’s decision to hire Ita ? BBA.
Facebook is paying very low underwriting fees, but banks are
keen to participate anyway because of the prestige of being in
the hottest Silicon Valley offering since Google Inc.
Dealmakers expect Brazilian banks to get more involved in
global deals to serve the growing investor base in Latin
America’s largest economy.
Private banking accounts in Brazil rose almost 7 percent to
464.3 billion reais ($241 billion) in the 12 months ended in
March, according to Anbima, the group that represents the local
securities industry. That amount more than doubled over the past
five years.
According to recent Forbes Magazine estimates, the country
has been creating 19 new millionaires a day since 2007. “If
Brazilians are going to be buying big apartments on Brickell or
buying Hermes, why shouldn’t they be buying shares of Facebook
or Carlyle?” said Doug Doetsch, head of the Latin American
practice at Chicago-based law firm Mayer Brown.
($1 = 1.93 Brazilian reais)
(Reporting by Guillermo Parra-Bernal in S GBPo Paulo and Olivia
Oran in New York; Additional reporting by Alu -sio Alves in S GBPo
Paulo; Editing by Tiffany Wu and Phil Berlowitz)
