CVS review proposed acquisition in the country

Cooled negotiations for the acquisition of control of the DPSP, owner of Drugstores Pacheco and São Paulo, by American CVS Caremark. According to the value found, CVS had already withdrawn the proposal of the Bureau, of about $ 5 billion for control, after difficulties so that the parties reached an agreement as to the amount to be paid by the DPSP, as anticipated yesterday the value Pro, real-time information service of Value. So far, according to a source close to the network, the talks went into "Bain-Marie" for lack of agreement on the final value of the operation.
Second source heard, controllers understand that the value of the company revolves around R $ 7 billion to $ 8 billion-a sum network about 800 shops and earnings before interest, taxes, depreciation and amortization (Ebitda) of $ 345 million in 2013. The net revenue was r $ 5.47 billion and last year.
It would have weighed the opposite to a faster evolution of the position of Cheap family conversations, founder of Drugstores Pacheco, headquartered in Rio de Janeiro. The Chairman of the Board of Directors of the DPSP, Samuel Roach sees the deal with resistances because it considers that there is still room for further gains for the network in the coming years the company is in the process of integrating their businesses, which could raise the value of a negotiation for sale in the future.
Second found the value, the CVS considered climbing the last offer to purchase for a sum over R $ 5 billion-this value is equivalent to 14 times the $ 345 million of Ebitda in 2013. The amount proposed would have reached $ 6 billion.
Expansion plans in Brazil through acquisitions, CVS wants to keep the partners in the management of networks of local drug stores, at least for a period of time, because of regional particularities of the business. It was at the negotiating table with Pacheco and São Paulo.
The DPSP would be open to negotiate a level of 20 to 25 times the value of Ebitda, i.e. in the range of $ 8 billion. Sought, companies do not have.
Somehow, the message about the limits that the CVS considers to reinforce their growth in the country became more clear weeks ago.
In conversation with analysts in the United States in may, Larry Merlo, President of CVS, said the company will adopt a "disciplined approach" in financial terms in the analyses for expansion in Brazil. The statement was made after he was asked about the evolution of Brazilian operation through acquisitions.
The DPSP is the second largest chain of drugstores in the country and their acquisition could be the fastest shortcut to CVS occupy a prominent position in retail pharmacies. With the DPSP and with the operation of the network, acquired in 2013 Onofre, CVS would have only 150 stores unless the industry leader Drogasil Streak.
As anticipated the value in January, CVS has sought new business in Brazil from 2013. In June, the "exam" magazine reported that CVS offered $ 4.5 billion for the DPSP, which hired Morgan Stanley to handle the negotiations. The Country would be representing the CVS. Morgan and Country do not share the information.