Sellers and buyers at Universidade São Judas (in negotiation) are widely knowledgeable about the business model and the size and characteristics of the market and its opportunities.

The impasse is that the seller wants R$ 1.1 billion and the buyer wants to pay R$ 750 million.

It turns out that buyers usually issue debt securities or take out other sources of financing for the acquisition. In the current circumstance of interest rates and risk feelings, creditors are looking for higher, solid and liquid guarantees, and still charging interest rates that represent Brazilian and international macroeconomic uncertainties, and this today makes the cost of funding more expensive to the level of being able to make the buyers' Internal Rate of Return unfeasible.

That's why buyers try to lower the purchase price, because financing costs are market conditions and there aren't many options to escape it.

What buyers signal is that paying R$ 750 million to sellers, plus interest and guarantees assigned and locked in favor of creditors can enable the return on the acquisition and the payback of the operation.

For now, that's what we know about the potential transaction.

At Terus Consulting, we conduct M&A and funding for acquisitions.

Talk to Terus right now: contato@terusconsultoria.com.br / (11) 2503-6747.

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