(Reuters) April 14, 2010 – Brazilian construction company Mills Estruturas e Servicos de Engenharia <MILS3.SA> and its shareholders raised 686 million reais ($392 million) in an initial public offering.

Mills, controlled by businessman Andres Cristian Nacht, sold 37 million shares in a primary offering at 11.50 reais each, within the 11.5 reais to 15.5 reais price range. The shares will start trading at the Sao Paulo stock exchange on Friday.

Shareholders of the company, including Nacht and his family members and private equity funds Axxon Group and Investidor Profissional, sold 22.6 million shares in a secondary offering.

 The shareholders had initially offered up to 14.81 million shares of Mills, with underwriters having the option to add 15.48 million shares to meet demand.

Ten companies have held IPOs or follow-on share offerings in Brazil so far in 2010, raising a combined 11.54 billion reais ($6.6 billion).

The Mills offering was the second IPO in a row that priced within the expected range, helping to ease some of the concerns of a continued rout that could prevent more companies from going public.

Concerns about a slump in Brazil’s stock offerings gained momentum last month after start-up shipbuilder OSX Brasil <OSXB3.SA> slashed its IPO, raising 2.82 billion reais, a fraction of the 9.92 billion reais initially planned. Nine more companies have filed to sell shares in Brazil in 2010, including seven through IPOs.

 USE OF PROCEEDS

Rio de Janeiro-based Mills, whose clients include oil giant Petrobras <PETR4.SA> and steelmakers CSN <CSNA3.SA> and the local unit of Arcelor Mittal <MT.N>, plans to use 62 percent of proceeds from the primary offering to buy new equipment to expand its presence in local infrastucture projects.

The company plans to use the remainding 38 percent of proceeds for strategic acquisitions.

Itau BBA, the wholesale and investment banking unit of Brazil’s largest private-sector bank Itau Unibanco <ITUB4.SA><ITUB.N>, managed the offering. BTG Pactual [BTG.UL] and Goldman Sachs <GS.N> also helped underwrite the IPO, according to the offering prospectus.

Underwriters stood to earn about 27 million reais in fees from the IPO, or 4 percent of the total offering, according to the prospectus. ($1=1.749 reais)

(Reporting by Aluisio Alvez, Writing by Elzio Barreto; Editing by Raymond Colitt, editing by Matthew Lewis)

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