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Posted on September 13, 2012
By Guillermo Parra-Bernal and Vivian Pereira
SAO PAULO (Reuters) – Carlyle Group (CG.O), the world’s No. 2 buyout firm, said it struck a deal to buy a 60 percent stake in Brazilian furniture retailer Tok&Stok, seeking to expand in a buoyant consumer market with rising incomes and robust demand for homes.
Two sources with knowledge of the deal, announced Thursday, told Reuters that the Washington, D.C.-based private-equity firm agreed to pay 700 million reais ($347 million) to Tok&Stok’s founders, Régis and Ghislaine Dubrule.
The couple will retain a 40 percent stake in the company. Régis Dubrule, who was born in France but became a Brazilian citizen, will continue as Tok&Stok chief executive. The Baruari, Brazil-based company, founded in 1978, has about 3,300 employees and morwe than 30 stores in the country.
The deal comes as local and global buyout firms are increasing their purchase of Brazilian companies to take advantage of a market with about 200 million consumers. Carlyle will tap a $1 billion fund, raised last year to invest in South American companies, to pay for the Tok&Stok acquisition.
“Tok&Stok is an outstanding business with a superb market position, exceptional brand recognition and a unique shopping experience for consumers and we are excited about its growth prospects,” Daniel Sterenberg, a principal who works with Carlyle’s South America buyout team, said in a statement released by the company.
Carlyle set up a Brazil-based unit in 2008, with co-founder David Rubenstein frequently visiting the country since then to spot potential business opportunities. The firm has already invested in tourism company CVC; health plan broker Qualicorp (QUAL3.SA); lingerie maker Scalina; toy retailer Ri-Happy Brinqueidos; and Grupo Orguel, an equipment rental company.
Some of the funds for the Tok&Stok purchase will come from another local fund advised by the firm and Banco do Brasil (BBAS3.SA), the nation’s largest bank.
The transaction is subject to approval by regulators and is expected to close in the fourth quarter, the Carlyle statement added.
(Additional reporting by Jochelle Mendonca in Bangalore; Editing by Saumyadeb Chakrabarty and John Wallace)