SÃO PAULO, Brazil – Brazil’s first initial public offering of the year started trading on Tuesday as a veterinary medicine company, Ouro Fino Saúde Animal Participações, made its debut.
The company, trading under the OFSA3 ticker on the BM&FBovespa’s Novo Mercado in São Paulo, priced its stock at 27 reais ($11.02) a share, the upper end of the range it estimated in its preliminary prospectus. The shares closed up about 2.4 percent to 27.65 reais on their first day of trading.
Ouro Fino, founded in 1987, has 123 veterinary products including medicines and vaccines.
The offering comes as Brazil’s economy continues to sputter. The country recently entered a recession after posting negative growth in the first and second quarters of this year. It also comes amid political uncertainty for Brazil. The country holds a runoff vote in contentious presidential elections this Sunday with its current president, Dilma Rousseff, and her challenger, Aécio Neves, neck-and-neck in polls.
Still the offering suggests a pent-up demand for Latin America’s largest economy.
Ouro Fino was approved and registered to raise about 418 million reais ($170 million) in the I.P.O. and sell 15.48 million shares, according to the website of the CVM, Brazil’s chief markets regulator.
That includes supplemental shares which can be sold in the next 30 days.
To date though the company and existing shareholders have sold 13.46 million shares at a total value of 363 million Reais, according to the company’s final prospectus.
The I.P.O. was led by JPMorgan, and also included Itaú BBA, Bradesco BBI and BB Investimentos.
In addition to nearly 1.9 million shares sold by the company, about 11.54 million shares were sold by the company’s founders, Jardel Massari and Norival Bonamichi, as well as the private equity arm of BNDES, Brazil’s national development bank.
After the offering, Mr. Massari and Mr. Bonamichi will still be the company’s two largest shareholders, according to the final prospectus.
Before the share pricing, Ouro Fino also received an investment of 200 million reais from the American private equity firm General Atlantic. The firm did not participate in the pricing of the I.P.O per Brazilian regulations, but its investment was conditional on the I.P.O. going forward.
General Atlantic now becomes the third-largest shareholder in Ouro Fino.
Ouro Fino’s adjusted earnings before interest, taxes, depreciation and amortization for the first half of this year was 41.2 million reais, a 23 percent increase over the first half of last year. Net revenue for the first half of 2014 was 193.1 million reais, up 26.3 percent over the first half of 2013. Net revenue in 2013 was 384 million reais.