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Advent acquires Quero-Quero, Brazilian home-improvement retailer

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  • Retailer has 170 stores and owns a credit card and consumer finance company
  • Sales of US$450 million forecast for 2008

Advent International, the global private equity firm, today announced that it has acquired Quero-Quero, a leading home-improvement retailer in the south of Brazil. Quero-Quero’s selling shareholders have retained a minority stake in the company. The value of the transaction was not disclosed.

Founded in 1967 as a one-store retailer, Quero-Quero has expanded significantly and today operates 170 home-improvement stores in small and mid-sized towns across Rio Grande do Sul, a state in southern Brazil. The stores offer a wide assortment of building materials, home appliances, electronics and furniture.

Quero-Quero also owns a credit card company, VerdeCard, which has two million cards issued through a network of over 20,000 affiliated stores, and a consumer finance company, providing consumer credit, personal loans and extended warranties. Combined, the group has over 3,000 employees and is forecasting sales of US$450 million for 2008.

The acquisition of Quero-Quero was funded mainly by Advent’s LAPEF IV fund, which closed on $1.3 billion in July 2007 and is the largest private equity fund in Latin America. Advent also announced today the acquisition of Aerodom, the leading airport group in the Dominican Republic, and in the last 12 months the firm’s Latin American team has invested in seven companies with a combined enterprise value of over $2.5 billion.

“Quero-Quero is a very successful company in small and mid-sized communities in southern Brazil,” said Luiz Antonio Alves, a Principal in Advent’s São Paulo office. “It combines home-improvement retailing and consumer finance services for low-income consumers. Our investment will broaden the company’s growth capabilities in two sectors where Advent has significant experience in Latin America.”

One of Quero-Quero’s key strategic objectives is to become the market leader in all three states of southern Brazil. “The home-improvement segment is expected to grow rapidly, as Brazil still has a large housing deficit and low-income consumers are becoming more affluent,” Mr. Alves said. "As Quero-Quero seeks to profit from these trends, its consumer finance and credit card businesses will be important differentiating factors, compared with other retailers.”

To achieve regional leadership, Quero-Quero plans to open over 200 new stores in the south of Brazil in the next four years. Additionally, the company will seek to accelerate growth by increasing the number of credit cards issued and expanding VerdeCard’s affiliated network of outlets.

Quero-Quero’s existing management will continue to oversee the company and drive the growth initiatives. “Quero-Quero has an excellent management team, known for its focus on innovation, large investments in technology and development of a talent pool from the communities where the company operates,” Mr. Alves said. This core executive group will be reinforced by a number of new outside directors with relevant experience in southern Brazil, including Christophe Auger, who has a broad background in the retail sector, having worked for Wal-Mart, Sonae and local retailer Dicico.

Quero-Quero operates in two sectors where Advent has a strong track record in Brazil: retail – with recent investments including Viena, Grupo RA and Dufry South America (BOVESPA: DUFB11) – and consumer finance services – with investments including CSU CardSystem (BOVESPA: CARD3) and Paraná Banco (BOVESPA: PRBC4).

 

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