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Blackstone Agrees to Buy 40% Stake in Brazil’s Patria

29 September 2010

(Bloomberg) September 29, 2010 – Blackstone Group LP, the world’s biggest buyout firm, agreed to buy 40 percent of Patria Investimentos, a Brazilian private-equity and asset-management firm, to expand in Latin America.

Blackstone, based in New York, will pay $200 million in cash and stock for the stake in the Sao Paulo-based firm, said a person briefed on the deal, who asked not to be identified because the price and other details haven’t been made public. Blackstone gave no financial details in a statement announcing the acquisition.

The transaction will enable Blackstone “to benefit from the fast expanding business opportunities in the country,” Stephen Schwarzman, Blackstone’s chairman and co-founder, said in the statement.

Garrett Moran, who heads the company’s private-equity unit, told investors last week that Blackstone has created alliances in emerging markets. This may help boost revenue and profit as dealmaking struggles to recover from the financial crisis. Buyout firms worldwide have announced $69.7 billion of acquisitions this year, compared with $446 billion during the same period in 2007, the height of the leveraged buyout boom.

Carlyle Group, the world’s second-largest private-equity company, has stepped up investments in Brazil, whose economy is expected to grow at the fastest pace in more than two decades this year. Carlyle, based in Washington, agreed in July to buy a controlling stake in Brazilian health-care company Grupo Qualicorp in a transaction valued at $1.2 billion.

Blackstone has dropped more than 60 percent since selling shares to the public in June 2007. The stock rose 38 cents to close at $12.37 in New York today.

Valor Economico, a Sao Paulo-based newspaper, reported the deal between Blackstone and Patria earlier today.

By Alexander Cuadros and Vivek Shankar