Brazil’s Sole Traded Jeweler Gains in Debut

(Bloomberg) -- The jewelry chain Vivara Participacoes SA gained in its trading debut in Sao Paulo after raising almost $500 million in the third initial public offering in Brazil this year.

The shares advanced as much as 3.5% to 24.84 reais from the 24.00 reais offer price, but they pared gains over the session to close at 24.11. Brazil’s benchmark Ibovespa equity index rose 0.6%.

The IPO raised about 2.04 billion reais ($496 million), without considering greenshoe amounts, and will partially be used to open brick-and-mortar stores, expand the firm’s industrial park and launch a new brand. Another chunk of the money will go to the Kaufman family, which founded the firm and control it with a stake of about 60% after the offering.

“Vivara is a premium company that was able to keep high margins even during Brazil’s recent crisis,” Carlos Daltozo, the head of equities at Eleven Financial Research, said in an interview. “It’s a leader in its segment, with a vertical structure and a well-known brand, which facilitates its expansion.”

While there’s no direct peer for Vivara in Brazil’s stock exchange, some analysts have been comparing the firm’s multiples to other retailers including Arezzo Industria e Comercio SA and Cia Hering. According to Daltozo, the IPO pricing implies a price-to-2020 earnings of around 25.3 times. Outside Brazil, Tiffany & Co. has been trading around 17 times its forward earnings.

Vivara, which also sells watches, perfumes and other accessories varying from wallets to sunglasses, was founded in 1962. The Sao-Paulo based company had set a target range of 21.17 reais to 25.40 reais for its IPO.

To contact the reporter on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Julia Leite, Catherine Larkin

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