Carlyle in $1bn Brazilian healthcare deal

General Atlantic is exiting its minority position in healthcare management company Qualicorp as Carlyle takes control.

The Carlyle Group has struck its second deal in Brazil with the purchase of Qualicorp, a consultant and management firm for private health insurance plans.
Financial terms were not disclosed, but a source close to the matter told PEO Carlyle will invest more than $1 billion with equity coming from Carlyle Partners V, a $13.7 billion buyout fund, and the Carlyle South America Buyout Fund, which was launched in 2009. Brazilian media reports have pegged the deal size at roughly $1.5 billion, while the Financial Times reported it at $1.2 billion including debt and equity.

Brazil’s stability, growth and credibility in the global economy make it a particularly attractive place to invest now.

Stephen Wise

Expected to close in August, the transaction involves fellow private equity firm General Atlantic selling its minority shareholding in Qualicorp. Growth equity-focused General Atlantic invested an undisclosed sum in November 2008.

“Brazil’s stability, growth and credibility in the global economy make it a particularly attractive place to invest now,” Carlyle managing director Stephen Wise said in a statement. General Atlantic managing director Jonathan Korngold added his firm would continue to be active in Brazil, calling it “an attractive market”.

Brazil has been a hot market for private equity this year. In May, London-based Apax Partners made its debut in the country with a $1 billion investment for a 54 percent stake in Tivit, an integrated IT company. “Brazil is a large market, the 10th largest economy in the world, with exciting demographics, growth projections and macroeconomic stability,” a spokesman for Apax told PEI when the deal was inked. Also in May, energy investment giant First Reserve announced it was investing $500 million in Brazil-based Barra Energia, an independent exploration and production company.

Carlyle’s first private equity investment in Brazil came this January when the firm invested $250 million for a 63.6 percent stake in CVC Brazil Operadora e Agencia de Viagens, a major operator of tours and travel services throughout Latin America. Carlyle had previously invested in Brazil, but not in traditional private equity deals. The firm’s South American real estate team made investments in the country, but that platform has been wound down.