March 24, 2023

DealBook: UnitedHealth to Buy Control of Brazilian Company for $4.9 Billion

UnitedHealth chief executive Stephen HemsleyDanny Moloshok/ReutersUnitedHealth’s chief executive, Stephen Hemsley.

8:52 a.m. | Updated

The UnitedHealth Group agreed on Monday to buy a 90 percent stake in the Brazilian health care provider Amil Participações for $4.9 billion, as the American insurer looked to expand in the fast-growing country.

Insurers like UnitedHealth have been hunting for growth opportunities overseas, hoping to counter tepid business prospects in their home markets. Even the rollout of the Affordable Care Act, which is expected to increase the number of customers, will not significantly drive profits.

With the deal, UnitedHealth is aiming to capitalize on the favorable demographics of Brazil, which is benefiting from a strong economy and a growing middle class. The number of policyholders for private health benefits rose 37 percent from 2005 to 2011. Even so, only a quarter of Brazil’s population has such coverage. By contrast, nearly 80 percent of Americans buy health insurance.

Amil is one of the country’s largest health care providers, with more than five million customers. It is on track to post revenue of $5 billion this year, 15 percent more than in 2011.

“Brazil has emerged as a consistently growing and evolving market for private sector health benefits and services,” UnitedHealth’s chief excutive, Stephen J. Hemsley, said in a statement. “Combining Amil, the clear market leader serving an underpenetrated market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years.”

Under the terms of the deal, UnitedHealth, based in Minnetonka, Minn., will first buy a 60 percent stake in Amil, and then acquire an additional 30 percent during the first half of 2013. After securing an estimated $600 million of Brazilian tax breaks, UnitedHealth said the proposed deal would cost around $4.3 billion.

Amil’s founder, Edson Bueno, and business partner, Dulce Pugliese, currently control around 70 percent of the business. They will retain a 10 percent stake in Amil. Mr. Bueno also will buy $470 million of UnitedHeath’s shares and hold them for at least five years, according to a company statement. Mr. Bueno will continue to run Amil and will also join UnitedHealth’s board.

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DealBook: Crowd-Funding Merger Points to Ambitions in Latin America

SAO PAULO — Buenos Aires-based crowd-funding site Ideame has acquired Brazilian company Movere, in a deal that may prompt more consolidation in this sector in Latin America.

One-year-old Ideame said it had acquired 100 percent of Movere’s shares in exchange for 15 percent of Ideame’s stock, valued at about $ 2.5 million. Movere, based in Rio de Janeiro, is thought to be Brazil’s second largest crowd-funding site.

While most Latin America’s crowd-funding sites are country-specific, Ideame is trying to become a top player for the entire region. It started at the same time in Argentina, Chile, and Mexico.

The Ideame acquisition comes as the popularity and success of Kickstarter in the United States has been fueling the development of similar sites throughout the world.

Kickstarter, backed by Union Square Ventures, recently said that it would expand to Britain this year but for now it operates only in the United States. While anyone in the world can fund projects on the site, only United States residents can create them because of the requirements of the payment provider,

Kickstarter declined to comment if it had plans to expand to Latin America.

Ideame registered 117,000 total unique visitors in July, according to comScore data. (The company did not exist last July.) Brazil’s leading crowd-sourcing site, Catarse, notched 104,000 from 21,000 in July 2011. In comparison, Kickstarters’ Web traffic in Latin America grew to 194,000 last month, from 31,000 total unique visitors in July 2011.

Ideame was founded in 2011. One of the founders, Mariano Suarez Battan, previously founded Buenos Aires-based Three Melons, which was sold to Playdom in 2010 before The Walt Disney Company acquired Playdom. Another founder, Tiburcio de la Carcova co-founded Chile-based Atakama Labs, sold to Japan’s DeNA last year.

The two other founders are Juan Pablo Cappello, a Chilean lawyer, and Eduardo Costantini Jr., a filmmaker and son of the founder of the Museo de Arte Latinoamericano de Buenos Aires, or Malba.

The company’s investors, who have raised more than $1 million, include the founders and Lawence Benenson, who is with Benenson Capital Partners and a trustee at the Museum of Modern Art in New York.

Others include Andy Kleinman, former head of Zynga’s Latin America operations, and Wences Casares, Lemon co-founder and iconic figure for Latin American entrepreneurs.

Movere said in its first 15 months it received more than $300,000 in funds pledged. Out of 143 projects, 60 reached their funding goal. The two companies combined have $420,000 pledged.

Ideame had also initially registered in Brazil, contemplating growing here solo. But Mr. Cappello said in an interview that they ultimately decided that “ Brazil is not a market that goes well when you don’t have a local presence.”

One challenge Ideame faces in becoming a regional crowd-funding player is integrating payment systems which vary from country to country.

For example, it uses Dineromail for Chile and Mexico, MercadoPago for Argentina, and MoIP for Brazil.

Rebecca Plofker, Ideame’s business development head said in an interview that it now has an agreement with PayPal for transactions across countries and 20 percent of their contributions currently use the service, a figure she expects to increase.

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