Prospects for the M&A and IPO market in Brazil

Despite two very challenging years for the Brazilian economy and population, due to the consequences left by the COVID-19 pandemic, the M&A market and the entry of new IPOs are already showing signs of recovery. In the first half of this year alone, 26 new companies entered the stock exchange, with another 38 waiting in line for their turn. For comparison purposes, in the entire past year, the number of new IPOs did not exceed the 28 mark.

This year is already showing signs that it will exceed 2020. In the world of business and mergers, having a year with better performance than the other is something natural, but the difference is that – and this should not be forgotten – according to Reinaldo Grasson, Financial Advisor and partner at Deloitte, a U.S.-based service company, is precisely the fact that we are still in a pandemic.

We saw many companies that used this time to completely rethink their business plans, whether to accelerate the transformation to the digital environment or to invest in diversified segments that are somehow part of their core business.

According to many analysts, the expectation was that the pandemic would be a reason for fear for companies seeking to venture into the IPO territory, but what was noticed was exactly the opposite.

Many investors realized that the instability in the country made it not worth leaving their money ‘idle’ and losing its value, so seeking investment alternatives was the best option,” analyzed Fábio Cruz, who is also a partner at Deloitte.

Moreover, he attributed the growth to the stronger marketing recently received by acquisitions and shares, including the interest of digital influencers.

For the two specialists, this significant
recovery of the sector is largely thanks to
the entry of “smaller” players in the game.

Today, starting an IPO journey is no
longer a reality only for billion-dollar
companies, but also for fintechs –
companies dedicated to e-commerce –
and investments are much more liquid
and much more diversified,
” said
Grasson.

The partner points to a great dispersion of
sectors of the economy as one of the
responsible factors. Cruz, in turn, stresses
how the entry of natural persons helps
explain the acceleration of the market.

We are talking about a gross increase
in new registered legal entities
(CNPJs) – the so-called ‘unqualified
investors’ – something we had never
really witnessed before.

One aspect that this recovery of the market also helps to illustrate is the maturation of
Brazilian companies with regard to entering the world of shares and public listing. Even if it
does not appear to be the case, planning for an IPO is done carefully and with a view to the
long term (the difference between a successful IPO one that is not so much lies here). Even
companies that appear to be prone to defaulting, or which do not have the best image, are
investing a good deal of their time and resources in IPO planning.


Despite the good prospects, a degree of caution is needed. The end of 2021, as well as the
entire year 2022, promises to be politically turbulent in light of the upcoming elections.
Following these “aftershocks,” a 2023 with more synergy can already be seen at the end of
the tunnel.

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