By Equipe de Redação
Posted in July 6, 2022
SÃO PAULO (Reuters) – Brazilian environmental services company Ambipar announced on Wednesday that its subsidiary, Emergência Participações, has reached an agreement with HPX to form Ambipar Emergency Response, which will have its shares listed in New York, causing its stocks to surge by 18%.
The agreement with HPX, a blank-check company (SPAC) listed in the United States, gives the combined company an enterprise value of 3.1 billion Brazilian reais and is expected to drive its growth in global markets. The equity value of the new company is estimated at 2.9 billion Brazilian reais.
This move comes less than a year after Ambipar canceled the initial public offering (IPO) of its waste management company, Environment ESG, due to unfavorable market conditions.
Ambipar stated that the agreement includes a guaranteed minimum capitalization of $168 million in Ambipar Response, according to a relevant fact disclosed to the market. If there is no share redemption by current HPX shareholders, the capitalization could reach $415 million, it added.
Around 10:25 a.m., Ambipar’s stocks were surging by 17.34% at 26.80 reais on the São Paulo stock exchange, representing the best performance in the Small Caps index, which was up 1.52%. At its peak, the shares reached 26.99 reais (+18.17%).
As part of the capitalization, Ambipar will contribute $50 million along with investments from a group of investors, company executives said in a conference with analysts.
The funds will be used to accelerate the organic and inorganic growth of Ambipar Response, said Ambipar, which will remain the majority shareholder of the combined company, holding approximately 71.8% of its share capital.
Ambipar Response has a portfolio of over 10,000 clients in locations such as the USA, Brazil, Canada, and the United Kingdom and will take on the role of Emergência as an industrial services provider and environmental emergency response.
After the completion of the deal, Ambipar Response, a company established under the laws of the Cayman Islands, will hold all the issued shares of Emergência and will be listed on the New York Stock Exchange under the ticker symbol “AMBI”.
Ambipar’s Chief Financial Officer, Thiago da Costa Silva, said in the conference that the listing is expected to take place “at the end of September, beginning of October”.
Company executives also stated that the listing of Brazilian Depositary Receipts (BDRs) for Response on B3 (Brazilian stock exchange) is a possibility, but it will only be discussed after the shares are launched in the United States. BDRs are receipts backed by assets traded abroad.
Ambipar said that if certain undisclosed conditions are met, the company will also have the right to a potential earn-out, increasing its equity stake in Ambipar Response and adding 110 million reais to the implied enterprise value of the combined company.
(With additional reporting by André Romani)
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