Brazil’s Ambipar announced new IPO

RIO DE JANEIRO, BRAZIL – Ambipar will spin-off its waste management and treatment subsidiary, Environmental ESG, for a company IPO.

The announcement came yesterday, Augsut 19, when Ambipar detailed that this will be a primary offering. There was some expectation in the market of a similar move, considering that Environmental was the most active division in acquisitions in the second quarter and gained prominence in management’s talks with investors.

Ambipar’s CEO Cristina Andriotti resigned from her position in order to assume the leadership of Environmental ESG. In her place the company has appointed Leon Tondowski, who since August last year was director of strategic development.

The company hired the executive from the Brazilian Veolia Group operation, a leader in waste, water, and energy management, where he held different directorships over the course of 8 years.

With a fast-paced acquisitions strategy – almost 20 since its IPO in July last year when the company raised R$1.08 billion (US$200 million) – Ambipar has not only increased in size on the financial statements, but also on the stock exchange. Its shares sold for R$24.75 at the IPO, the top of the indicative range. Today it is worth more than double that – the shares closed the day at R$52.50.

The company is essentially divided into two businesses, Waste Management and Response, in which it operates emergency care services. In the second quarter, Environmental represented 47% of revenues and the same proportion of EBITDA.

The expansion of the Environmental division came mainly with the acquisition of Disal Ambiental, a waste processing company that operates in Chile, Peru, and Paraguay. The R$800 million transaction doubled the business division’s revenues. But it was not the only one in the period – in the second quarter alone the company bought Boomera, Metal Ar, Centro Oeste and Ecológica Nordeste in this business area.

According to a source, with the current size and the interest of investors in the business, the company sees room to raise at least another billion in the subsidiary alone. The timeline for spin-off and listing should give the company some time to launch the operation in a less volatile moment, the source said. Despite the growth and having positioned itself in the preference of some managers in recent months, Ambipar was not spared from the bloody week on the stock exchange – in five days its shares dropped 9%.

It was not only traditional financial investors who looked at the company’s shareholder base, but also those linked to environmental investments – and activists for that matter. In July, the company announced a partnership with Gisele Bündchen, who became a member of the company’s Sustainability Committee and also acts in the promotion of the brand’s institutional image, mainly in the ESG principles – the model eventually became a shareholder herself.

At the IPO, Ambipar was valued at R$2.8 billion. Today, the company’s market value reaches almost R$6 billion.