American investor deals resales

The American businessman Marshall Cogan-consolidated companies in the automotive retail in the United States and China among the decades of 1990 and 2000-already have ready the financial structure and initiated the first negotiations of an ambitious plan which foresees investments of up to $ 1 billion on the acquisition of car dealerships in Brazil.
At the moment, he is in advanced negotiation with three groups of resales, which together add up to 50 shops and annual net revenue of r $ 1.5 billion. Only in the acquisition of these companies, regarded as the initial platform of Cogan to the country, are planned investments of about $ 250 million, or almost $ 580 million.
The three selected groups still go through audit process-the so-called "due diligence"-and the value of the acquisition has not yet been closed between the parties. Therefore, the names of those involved are kept confidential. But, if all goes well, the first purchase will be settled until next month so that the Auto Group Brazil (AGB), the firm of Cogan in Brazil, is "operational" at the turn of the year.
The negotiations include mostly luxury car dealerships, as well as a stake in the company that represents the UK brand Bentley in the Brazilian market. Only the largest group negotiated by Cogan administers 35 resellers brands such as BMW, Mini Cooper, Land Rover and Volvo, as well as two designer stores of Harley-Davidson motorcycles. Another dealer has six dealerships of the brands Audi, Volkswagen and Bentley. The third group already owns four Honda car dealers and will open another three stores of the mark over the next two years.
This is the first, but not the only step predicted by Cogan with the AGB. His plan envisages creating a group of 180 stores and revenues of R $ 6 billion over the next five years. When it reaches this size, the idea is to open the capital of the company in an initial public offering of shares (IPO, the acronym in English) in Brazil and in the United States.
The entrepreneur is not come alone. A large Asian investment fund have expressed interest in participating in the project and, at the same time, a private equity fund is now ready to House a maximum of 20 more investors in Brazil. Fernando Hormain, Camargue Capital partner, who set up the financial structure for Cogan, says the private equity fund aims to capture between $ 400 million and $ 600 million. Are features that add up to contributions of Cogan, estimated at $ 150 million, and Asian Fund of $ 150 million to $ 200 million in the business, said Hormain. "In total, the AGB will have three investment vehicles: the private equity fund, the Asian Fund and the own Marshall Cogan," informs.
As part of the agenda to attract institutional investors to the business plan, Cogan comes to São Paulo to participate, on 9 December, the main Conference on private equity in Latin America, the Private Equity Brazil Forum. After that, planning on moving permanently to Brazil along with his executive team.
The investor has a long experience in automotive retail companies consolidate. In the early 1990, bought a series American family-controlled dealerships with United Automotive Group. After opening the capital of the company on the New York Stock Exchange, increasing its market value of $ 88 million to more than $ 730 million, Cogan sold United Automotive for Penske in 1999, giving rise to one of the largest groups of reselling cars in the world. With money in hand, the investor joined the Citigroup in buying BMW dealerships in China in 2005, business which was later sold for $ 100 million.
Now with 76 years, Cogan wants to replicate in the Brazil business model deployed before in his hometown and in China. The entrepreneur is studying the Brazilian automotive market for more than two years and know many resales of imported vehicles are pressed by the restrictive policies of the Government that have limited imports of cars. Just like I did before, the idea of Cogan is to raise these companies with a strategy based on the development of profitable business-automotive services, auto sales and financial products to resell market operations. The investor evaluates possible tripling, to more than 15%, the margin for cash generation resales that are in your target acquisition in Brazil.