(NeoFeed) Seneca Evercore, a boutique investment bank, facilitated $3.8 billion in transactions over the past 12 months. Now, it’s gearing up for the expected surge in mergers and acquisitions in 2024.
By Carlos Sambana - October 24, 2023
Recently, several deals have made waves in the M&A market: the privatization of Arco, the sale of Sinqia to Evertec, the sale of Luizaseg (owned by Magalu) to Cardif, the sale of Odata to Aligned, and B3’s acquisition of Neurotech. In all of these transactions, one player stood out—whether on the buyer’s or seller’s side—quietly: Seneca Evercore.
In a market where banks and advisors fiercely compete for deals, this independent M&A boutique has established itself as one of the sector’s key players. According to data from FactSet, Seneca Evercore handled $3.8 billion in transactions over the past 12 months, ranking just behind Morgan Stanley, which handled $6 billion in the same period.
“Our most recent deal was advising Magnetis on its sale to BTG,” says Daniel Wainstein, co-founder of Seneca Evercore, in an interview with NeoFeed. Currently, Seneca Evercore and its 30-strong team of bankers are managing around 35 deals. However, many of these are expected to close next year due to delays experienced this year.
“Until April, we advised our clients to hold off on launching transactions,” says Wainstein. But then Brazil’s risk profile began to decline, the economic outlook improved, and international interest increased, prompting a shift in recommendations. “I believe the first half of 2024, barring a global catastrophe or a serious issue in Brazil, will be a period of abundance,” he adds.
This “abundance” translates to moving from an M&A market worth $8.2 billion in the first half of 2023—the second weakest in recorded history, surpassed only by the pandemic period in 2020—to potentially reaching $30 billion in deals. This would mark a dramatically different landscape from what we’ve seen this year.
“We faced the worst credit crisis I’ve witnessed in over 25 years of my career,” says Wainstein. This was due not only to skyrocketing interest rates, which rose from 2% to 13.75%, but also to events like the Americanas and Light cases. “Many of the transactions that occurred weren’t even announced because no one wants to admit they received funding from a distressed-focused fund,” he explains.
With the expected market rebound, many entrepreneurs who delayed seeking capital to grow are likely to pursue deals for expansion or debt restructuring. “The capital needs companies had in 2022 remain. There’s a need for funding to rebalance debt structures and also to make investments that were put on hold during this period,” Wainstein says.
Additionally, a third factor is set to drive M&A activity next year: companies weakened by the credit crunch, which have become acquisition targets for larger firms with stronger balance sheets and access to capital.
“Those with access to capital are looking to seize opportunities. And those who are more vulnerable often recognize that it might be the right time to sell,” Wainstein notes.
While Wainstein doesn’t claim to have a crystal ball, his insights are worth noting. He’s one of the most experienced professionals in the mergers and acquisitions world. Formerly the head of investment banking at Goldman Sachs in Brazil, Wainstein was instrumental in building the bank’s operations in the country.
In 2013, he left Goldman to start his own firm alongside Rodrigo Mello, another Goldman alumnus, and Isaias Sznifer. “I reached a point where I really wanted to build something of my own. Goldman is an excellent institution, but like all large corporations, it’s not exactly the best environment for entrepreneurship,” Wainstein says.
“Starting Seneca Evercore allowed us to provide a new level of attention to clients during the most important transaction of their lives,” Wainstein explains. In addition to repeat clients and word-of-mouth referrals, Wainstein says they often encounter repeat counterparts. “We’ve completed five deals with XP on the other side, and we’ve done many deals with BTG as well.”
Seneca Evercore, for example, helped form WHG, which was later sold to XP. Another transaction involving XP was the sale of Monte Bravo’s equity interest when it was an independent financial advisor and is now a brokerage. “They are highly aggressive, dive into the details, and are tough negotiators,” says Filipe Portella, co-founder of Monte Bravo, who hired Wainstein’s boutique to advise him.
But beyond the sale itself, Portella highlights that the boutique’s key contribution was helping plan for “the day after” and the next steps for the business. “They continued to be involved even after the deal closed,” he concludes.
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