Itaú-Unibanco Acquires 35% of Avenue in a Surprising Move to Service Brazilians Investing in the U.S. Exchanges.

Itaú-Unibanco (NYSE:ITUB) acquires 35% of Avenue, a Brazilian brokerage house operating in the U.S. Banco Itau-Unibanco in two years will have control of the business in a surprising move by Brazil’s largest bank.

Avenue was valued at about $220 million (BRL $1.25 billion) pre-money valuation. The structure of the deal calls for Itau-Unibanco to pay $93 million in a primary round followed by a secondary tranche for the remaining purchase price, placing Avenue’s post-money valuation at about $260 million.

Avenue was founded by Roberto Lee, a former XP (NASDAQ:XP) officer, who in 2014 sold the brokerage house Clear to XP of Guilherme Benchimol. Later, XP released Lee from its non-compete clause in exchange for an option to buy a stake in Avenue, which Benchimol ended up not exercising it. Avenue received last year an investment from Softbank of BRL $150 million.

The fintech is a brokerage house based in Miami servicing Brazilian individuals and corporations interested in investing in the U.S. stock exchanges, and as of today the startup counts with half a million customers and about $1.1 billion under management.

Avenue is a direct competitor of highflying Brazilian fintech Nomad, which recently received a $30 million investment from Manhattan-based investment fund Stripes after a previous investments by Monashees, Spark Capital, Propel, Globo Ventures and Abstract investment funds of $20 million last year. As Itau-Unibanco acquires 35% of Avenue, increase competition will populate the space since another heavyweight Banco Bradesco paid $500 million to acquire BAC Florida Bank in 2019.

The Esquires and the Firms Behind the Deal

Freitas Leite Advogados acted as Brazilian legal counsel to Avenue.

Partners Cristiano Leite (picture), Raul de Paula Leite Filho and Cláudio Fabricio Lima led the firms’s transaction team with contribution from corporate associate Guilherme Peloia.

The top ranked Chambers Global 2022 Freitas Leite Advogados is based in São Paulo with offices in Rio de Janeiro, and is regarded as one of the top Venture Capital, M&A and Capital Markets firms of the country.

Willkie Farr & Gallagher, LLP acted as U.S. Counsel to Avenue with partners Philip Coletto and Ana Martini leading the firm’s deal team.

Wilkie Farr is U.S. global law firm based in New York with offices in Chicago, Huston, Los Angeles, San Francisco, Palo Alto, Washington, Brussels, Frankfurt, London, Paris and Rome.

Campbells acted as international counsel to Avenue with partner Charlie Pywell leading the firm’s deal team.