02 03 2016

Crédito Real acquires 70% stake of Maravalley Corporation

BLP advises Crédito Real on the deal


Credito Real, S.A.B. de C.V., SOFOM, E.R. ("Credito Real") informs the acquisition, through one of its subsidiaries, of 70% of the equity interests issued by a Panamanian company named Maravalley Corporation, which is a holding company with several entities in Costa Rica, Nicaragua and Panama operating under the "Instacredit" commercial name. This transaction contributes to Credito Real's business diversification.  Instacredit is a group of financial and non-financial entities, which grant loans to the low and middle-income segments of the population, whose needs are not adequately served by traditional banking institutions. Instacredit started operations in 2000, and currently operates 52 branches in Costa Rica, eight in Nicaragua and one in Panama. As of September 2015 Instacredit had a 159 million US dollar gross loan portfolio, diversified in four business lines: personal loans which represented 46%, auto loans 36%, SME loans 17% and mortgage loans 1%. By country, the loan portfolio of Costa Rica represented 87% of total; and the Nicaraguan and Panamanian represented 11% and 2% respectively. Instacredit has a well-recognized brand in the market, a distribution and service network serving 140,000 customers with potential to be scaled, and a credit analysis platform with detailed customer information. The average loan amount of Instacredit is 1,100 US dollars, and the average loan term is 34 months. Finally, the non-performing loan ratio as of September 2015 was 3%. As a result of the acquisition, Credito Real will consolidate Instacredit's results in its financial statements beginning on February 22nd, 2016. The aggregate consideration payable for this transaction assumes a value of 70 million USD, which corresponds to a P/E multiple of 5.5 times 2016 estimated earnings; this multiple might vary depending on the achievement of some profit targets. Additional to this amount, 21 million USD will be used to refinance some Instacredit liabilities. BLP advises Crédito Real with a team including Vivian Liberman (Picture), Andrea González, Luis Hernández and Warren Corrales. Involved fees earner: Vivian Liberman - BLP; Andrea González - BLP; Warren Corrales - BLP; Luis Hernandez - BLP;

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