Mercado Livre creates acquisitions company to invest in Latin America

Mercado Livre and the investment company Kaszek announced this Monday () the registration of an initial public offering (IPO) of 46 million shares of Class A common stock with the US Securities and Exchange Commission (SEC). The venture sponsored by them is a Special-Purpose Acquisition Company – SPAC.

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SPACs are the big news in Wall Street investments: by through them, investors come together to acquire or create companies. The market has received them with open pockets. In the case of Mercado Livre with Kaszek, the objective is to acquire a company from the Latin American digital ecosystem and accelerate its capitalization and growth.

Image: Reproduction/Canaltech/André Magalhães

This model is also known as the “blank check company”. That’s because investors contribute funds so that SPAC’s drivers can invest in the way they committed. Mercado Livre and Kaszek seek to acquire or create companies from different segments, such as commerce, financial services, logistics, health, education, business software and entertainment.

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Initial price of US$ 13

The starting price of the shares will be US$ (R$ 52 in the current quotation) – which will make SPAC get US$ 52 million (BRL 1, $3 billion) — and the process is to be coordinated by BofA Securities, Goldman Sachs & Co LLC, Allen & Company LLC and JP Morgan. The offer will be made through a prospectus, copies of which may be obtained free of charge on the SEC’s website when they become available. 250 million (BRL million) at the close of an acquisition under a forward purchase agreement. SPAC would then have a total market value of US$ 1024 million (R$1.9 billion).

Image: Reproduction/Elements/leungchopan

Mercado Livre emphasizes that there is no guarantee that the offer will be completed as described or that its net product will be used as indicated. Statements are subject to conditions such as known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ from those indicated.

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