TTR Dealmaker Q&A – Moacir Zilbovicius

TTR Dealmaker Q&A

September 2016

Kroton Educacional acquires Estácio Participações

USD 1.63bn

Moacir Zilbovicius
Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados

On 16 August 2016 Estácio Participações accepted Kroton Educacional’s USD 1.63bn takeover bid. Moacir Zilbovicius was part of the legal team at Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados that advised the seller in this monumental transaction.


Q: How did Mattos Filho land the advisory mandate and when was the firm retained?

A: We were engaged in the first week of June thanks to our relationship with Estácio’s board members and owing also to referrals from financial institutions involved in the deal.

Q: What prompted your client to explore strategic alternatives?

A: Both Kroton’s and Grupo Ser´s offers were unsolicited. As far as I know, Estácio was not pursuing strategic alternatives at the time. What ensued after Kroton’s offer was made public was basically the board members assessing the offer and pursuing the best alternative available for its shareholders.

Q: Beyond the economic factor, what made Kroton’s bid more enticing than Grupo Ser’s previous offer?

A: Several factors came into play, but, beyond the economic and strategic factors, one that played an important role was management´s assessment of the likelihood of shareholders from both companies approving the deal. 

Q: How does this transaction impact Brazil’s higher education landscape?

A: Both the Brazilian antitrust authorities and Ministry of Education are assessing the impacts of this deal, if any, and should issue their views on this, hopefully, sooner than later.

Q: What practice areas were critical in the deal and in what way did the transaction require Mattos Filho to employ its unique capabilities?

A: I am proud to say that Mattos Filho was involved in almost all of the recent merger transactions involving public companies in Brazil. This gives us not only a competitive edge, but also relevant know-how and expertise in handling such complex transactions. We have also actively participated in numerous deals involving corporations with no controlling shareholder or group, which enabled us to provide Estácio’s management with the specific guidance it needed to handle the unique situation it found itself in. Obviously, addressing the antitrust circumstances involved in the transaction was also highly important. We have a highly specialized antitrust group that allowed us to live up to the task at hand.

Q: What antitrust hurdles does the transaction face?

A: Though the deal was approved in the general shareholders meetings of both companies, it remains subject to the approval of the Brazilian antitrust authorities and Ministry of Education. The businesses of Kroton and Estácio are very complementary, in particular from a geographic standpoint, and the parties are confident that the necessary antitrust approval will be obtained in due course. 

Q: What distinguished this transaction from other M&A deals Mattos Filho has advised on?

A: The fact that it involved two companies with no controlling shareholder or group of shareholders, and that it was prompted by an unsolicited offer that led to competing offers from the market, and almost the launching of a tender offer by a relevant shareholder and member of the target´s board, made the deal very unique.

Q: How is the legal advisory work different in such a transaction where there is no controlling shareholder? 

A: Our work was mainly focused on advising the board of directors and the special committee that was created specifically to negotiate the transaction with Kroton.

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