Cosan Considers IPO for Moove

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Following a restructuring of its business holdings, Brazilian conglomerate Cosan is reportedly considering an initial public stock offering for its Moove lubricants business.

Based in Sao Paulo, Cosan recently completed the process of uniting its four main business units under a single holding company, Cosan S.A. Moove manufactures and distributes Mobil-branded lubricants in the Americas and Europe under a contract with United States-based ExxonMobil. Raizen, a joint venture with Shell, is Brazil’s second-largest fuel distribution business. Compass Gas e Energia, is a natural gas supplier, and Rumo is a logistics company.

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Cosan is also a large sugar processor that turns some of that raw material into fuels.

Officials said they did away with the previous looser structure to simplify management and to make the conglomeration more transparent.

Reuters and other news organizations reported last week that Cosan plans to conduct stock offerings for Raizen, Compass and Moove. A March 11 Reuters article quoted Cosan President Luis Henrique Guimaraes saying that it is a logical next step, given that Cosan wants to expand all of the businesses.

During a presentation for stock analysts Tuesday, Cosan officials said Moove has grown steadily in recent years and did so again in 2020 despite the impacts of the COVID-19 pandemic. Since 2016 revenues for the lubricant unit have risen from 1.9 billion real (U.S. $334 million) to 4.4 billion reals, while earnings before interest, taxes, depreciation and amortization swelled from 136 million reals to 477 million reals. In 2020 revenue and earnings grew 9% and 47%, respectively.

Moove sells lubricants primarily in Brazil, Argentina, Paraguay, Uruguay, Bolivia and the U.S., as well as the United Kingdom, France, Spain and Portugal. But officials said they plan to expand into a significant number of additional countries, perhaps focusing first on other parts of Europe and Asia.

During Tuesday’s presentation officials contended that the global lubricants industry represents a fertile field for the company’s ambitions. They described the industry as fragmented and “needing higher service quality and technology.”

Officials have not set a schedule for any IPOs, though they suggested that the first could happen in 2021. Cosan previously announced plans to conduct an offering for Raizen but tabled that initiative because of an unfavorable investment market.

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Brazil    Finished Lubricants    Market Topics    Region    South America