Global alternative asset manager The Carlyle Group has acquired a 25-percent ownership stake in Grupo Orguel, one of Brazil’s largest equipment rental companies. The company is currently controlled by the Guerra Lages family, which will maintain its majority ownership. Grupo Orguel rents construction equipment via 75 branch locations in 11 states in Brazil.
Equity capital for the transaction will come from the partnership comprising Carlyle's U.S. $776 million South America Buyout Fund and Fundo Brasil de Internacionalização de Empresas FIP (FBIE), a local R$360 million fund advised by Carlyle and Banco do Brasil. Financial terms were not disclosed.
Fernando Pinto, a principal on Carlyle's South America Buyout team, said, "Grupo Orguel's exposure to the fast-growing infrastructure, home building and oil and gas markets in Brazil and its long-track record of growth and profitability attracted us to this investment opportunity."
"This investment represents an important moment for Grupo Orguel,” said Sergio Fagundes Guerra Lages, Orguel’s CEO. “As we prepare to celebrate our 50th anniversary next year, Brazil is going through an unparalleled moment of intense investments in infrastructure, home building and oil and gas. Such projects will continuously require a broad range of high-quality and properly maintained equipment. Carlyle's industry expertise in equipment rental and its global reach will be instrumental in supporting Orguel in its mission to provide the best equipment and the highest level of service to our customers."
Carlyle established its South America Buyout team in 2008. In Brazil, Carlyle investment funds have also invested in CVC, a tourism operator; Qualicorp, a health plan broker and administrator; Scalina, a lingerie manufacturer and retailer; and toy retailer Ri-Happy. Funds advised by The Carlyle Group have previously invested in the equipment rental businesses through its investments in Hertz, the car and equipment rental company, and Coates Hire, Australia's largest equipment rental company.
Grupo Orguel was founded in 1963 by Fabio and Franscisco Guerra Lages as a construction equipment distributor in the state of Minas Gerais. In the 1970s Orguel was a pioneer in construction machinery rental in Brazil and it has expanded to become one of the largest construction equipment manufacturers and equipment rental companies in Brazil, employing more than 2,300 people. Grupo Orguel provides a full range of equipment, including scaffolding, shoring, concrete formworks, elevator lifts, aerial platforms, generators and electric tools, tapping several industries such as homebuilding, infrastructure, oil & gas and industrial construction. Grupo Orguel operates through 75 branches in 11 states and it is divided in seven brands: Mecan, Mecanflex, Locguel, Locbras, Orguel, Orguel Plataformas and Bramex.