Simpar (SIMH3.SA), a holding firm for Brazilian logistics companies Movida (MOVI3.SA), JSL (JSLG3.SA) and Vamos (VAMO3.SA), is preparing to expand into the United States and European markets in a bid to diversify its revenues, its chief executive told Reuters.
“In the next four to five years, we intend to have about 35% of our revenues in other currencies,” CEO Fernando Simoes said in an interview. “Currency diversification is part of our governance model.”
The company has already expanded through acquisitions into sectors as diverse as vehicle leasing and resale, infrastructure concessions, waste recycling and financial services.
In the last year and a half, Simpar has bought 18 companies to help its goal of expanding its gross revenue to 35.5 billion reais ($6.61 billion) by 2024.
Simoes said he expects the company’s inorganic growth trend to continue in the near future, especially in its heavy transport and car dealership units, under the brands JSL and Automob, respectively.
Tough conditions in the cargo transport market in Brazil, worsened by high fuel costs, have created opportunities for companies with a better cash flow position. As a result, JSL has bought six smaller rivals in the last two years.
A similar process should happen in the light vehicle dealership sector, said the CEO, a segment in which Automob has only 0.2% of the market but is one of the largest providers in the country.
“Nobody has consolidated this segment in Brazil yet, and we have the structure to do it,” he said.
Automob could be the fourth of the group’s seven business units to be listed on the stock exchange.
“It is today the one with the largest size for such an operation,” said Simoes, referring to a potential IPO, without indicating when this might happen.
Learn More: https://www.reuters.com/markets/us/brazils-simpar-plans-enter-us-european-markets-says-ceo-2022-07-18/