Brazil Fleury Acquires Hermes-Paradini Lab in Stock and Cash Deal

The deal combines two of the major health care Labs in Brazil

Brazil Fleury acquires Hermes-Paradini lab in a $1.1 billion in a cash and stock transaction after years of tentative agreements between the two companies. Fleury is one the largest and most respected laboratory of Brazil which was founded by doctors and became a national reference lab in the country.

The transaction combines Fleury’s class A franchise with the national leader in B2B market or lab-to-lab. The companies estimate that the business combination will increase the combine company’s EBITDA between BRL 160 to 180 million.

Fleury is paying 90% of the agreed price in shares of the company and 10% in cash or BRL 237 million. Hermes-Paradini shareholders will end up with 32%.7 of the new company. Under the terms of the agreement Fleury will incorporate Hermes-Paradini shares by paying BRL 2.15 in cash and another 1.2133 in Fleury shares for each share of Hermes-Paradini.

The board of the combined companies will have 10 seats of which Banco Bradesco will appoint three directors, the Paradini family will appoint three directors and the founding doctors who today hold 19.6% of Fleury will appoint three directors. Minority shareholders will have one director.

As Brazil Fleury acquires Hermes-Paradini, the company is poised to expand its already predominant market share in important Brazilian States.

The Esquires and the Firms Behind the Deal

Barbosa, Müssnich Aragão Advogados advised Group Fleury on the deal with Citigroup acting as its financial adviser.

Madrona Advogados acted as legal counsel to Hermes-Paradini.

Ochmann Advogados and Tavernard Advogados represented the controlling shareholders of Paradini.