Latache Capital, a São Paulo-based asset management firm specializing in distressed assets, continues its aggressive pursuit to acquire control of Oncoclínicas.
Founded in 2015 by Renato Azevedo, Latache manages over USD 230 million in assets across four investment strategies including distressed debt and private equity.
Latache offered to purchase Goldman Sachs’ 20.76% stake in Oncoclínicas at R$4.30 per share last December. This represented a 70% premium over the R$2.50 market price at that time.
Goldman Sachs rejected the proposal despite Latache’s efforts to negotiate directly at the bank’s New York headquarters. Founded in 2010 by Bruno Ferrari, Oncoclínicas has grown into Latin America’s largest cancer treatment network.
The company operates 145 treatment centers across 39 Brazilian cities, employing over 2,700 specialist physicians. Oncoclínicas maintains an exclusive partnership with Dana-Farber Cancer Institute, affiliated with Harvard Medical School.
Latache currently holds 10.19% of Oncoclínicas shares. Their strategy involves acquiring Goldman Sachs’ stake and then Banco Master’s 19.90% position to reach nearly 51% control.
Oncoclínicas Faces Financial Struggles
Oncoclínicas’ corporate bylaws contain a “poison pill” clause requiring any shareholder exceeding 15% ownership to launch a tender offer for all remaining shares.
Financial challenges plague Oncoclínicas despite its market leadership. The company reported an 81.5% decrease in net profit during the first three quarters of 2024. Its debt burden reached R$3.3 billion ($550 million) by September 2024.
To address these issues, Oncoclínicas approved a R$1.5 billion ($250 million) capital increase, with Banco Master committing R$1 billion ($167 million) and founder Bruno Ferrari pledging R$500 million ($83 million).
Goldman Sachs, which initially invested in Oncoclínicas in 2015 and once held 60% ownership, has seen its stake diluted after not participating in recent capital increases.
The investment bank now explores a “total return swap” arrangement to reduce its exposure while maintaining financial interest in the company.
Oncoclínicas shares traded at R$5.29 last Friday, significantly below their August 2021 IPO price of R$19.75. At the time of the IPO, the company raised R$3.6 billion ($600 million).