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SAO PAULO, Brazil, June 19, 2012 (GLOBE NEWSWIRE) — Azul Brazilian Airlines, in partnership with Amyris Inc. (Nasdaq:AMRS), Embraer (NYSE:ERJ) (BOVESPA:EMBR3) and GE (NYSE:GE), made a demonstration flight today using an innovative, renewable jet fuel produced from Brazilian sugarcane. The Embraer E195 jet operated by Azul departed from Campinas Viracopos Airport, flew over Rio de Janeiro, which is hosting the U.N. Conference for Sustainable Development (Rio+20) this week, and landed at Rio’s Santos Dumont Airport.

A photo accompanying this release is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13356

Known as Azul+Verde (“a greener blue” in Portuguese), this project began in November 2009 with the objective of evaluating a new concept in the development of a renewable jet fuel that could reduce greenhouse gas emissions. In addition to providing an alternative to fossil fuels, the initiative represents another major step towards a sustainable air transportation industry.

“Azul’s commitment to reducing our dependency on volatile petroleum products goes beyond reducing our costs. The main objective is to innovate in our service offerings, using the best technologies to reduce our carbon footprint as well as raise awareness among our customers that they are not just choosing an airline that is merely concerned about the environment but is taking steps to preserve it,” said Flavio Costa, Chief Operating Officer of Azul Airlines.

A lifecycle analysis and sustainability study developed by a Brazilian think-tank, Institute for International Trade Negotiations (ICONE), indicates that the Amyris renewable jet fuel could reduce greenhouse gas emissions up to 82%, when compared to convention fossil-derived jet fuel.

“Amyris’s renewable jet fuel has been designed to be compliant with Jet A/A-1 fuel specifications. To that end, we have successfully undertaken a series of tests that measure its performance,” said John Melo, President & Chief Executive Officer of Amyris. “This demonstration flight caps a major milestone in our jet fuel program and allow us to pursue our certification and commercialization goals,” Melo concluded.

This fuel, referred to as AMJ 700, is made using modified microorganisms that function as living factories, converting sugar into pure renewable hydrocarbon. Such a process results in a renewable jet fuel that, once approved, will meet the most rigorous requirements of the aviation industry as well as the American Society for Testing and Materials (ASTM).

“Developed as drop-in, the renewable jet fuel did not require any modification or adaptation in the aircraft for the demonstration flight,” said Mauro Kern, Executive Vice President for Technology & Engineering at Embraer. “The tests undertaken by Embraer with Amyris’s renewable jet fuel in Brazil were a success. This confirms the potential performance of this renewable fuel, whether on technical or environmental grounds. We are pleased with the technical success of this project and remain committed with the development of leading technologies, such as renewable fuels, that can contribute with the sustainability of the aviation industry,” Kern concluded.

“During our ground tests at GE’s engine testing facility in Ohio earlier this year, the Amyris renewable fuel met all the required test objectives, and, in combination with our latest GE engine technologies, can further help the aviation industry meet its environmental targets for net greenhouse gas reductions,” said Steve Csonka, GE Aviation Director of Environmental Strategy and Ecomagination.

“Azul greatly believes in Amyris technology. Brazil has abundant arable land, which allows for the growing of sugarcane in ways that do not displace other crops, such as food,” says Adalberto Febeliano, Director of Institutional Relations at Azul Airlines. “We expect that it will be possible to adopt this renewable fuel in commercial flights in the medium term, with a large-scale production economically viable,” he concluded.

This project had institutional support from Banco Pine, BR Aviation, Total, and the Inter-American Development Bank.

About Azul Airlines

Azul Brazilian Airlines has changed the landscape of Brazilian commercial aviation. With over 10% domestic market share, Azul is the third largest airline in Brazil, connecting 48 destinations, 47 cities, with over 400 daily flights. In addition to 52 Brazilian cities served by the company’s aircrafts, Azul serves 8 additional points via convenient bus connections. Azul currently operates a fleet of 54 aircrafts including 42 jets (32 Embraer 195 and 10 Embraer 190) and 12 turboprops (7 ATR 72-600 and 5 ATR 72-200). To date, Azul has served more than 19 million customers. Its mission: to stimulate air travel and boost the Brazilian economy using a simple formula: low prices and high quality service. The company’s success has drawn recognition not only within Brazil, but internationally: In 2011, Azul was voted the ‘Best Airline in Brazil’ by both Travel and Tourism and Flight Revue magazines; Awarded title of ‘Best Low-Cost Airline in Latin America’ by Skytrax. Was recognized as “One of The World’s 30 Hottest Brands’ by Advertising Age in New York. Learn more at www.voeazul.com.br.

About Amyris, Inc.

Amyris is an integrated renewable products company focused on providing sustainable alternatives to a broad range of petroleum-sourced products. Amyris uses its industrial synthetic biology platform to convert plant sugars into a variety of hydrocarbon molecules — flexible building blocks that can be used in a wide range of products. Amyris is developing and producing these products both as No Compromise® renewable ingredients in cosmetics, flavors and fragrances, polymers, lubricants and consumer products, and also as No Compromise renewable diesel and jet fuel. Amyris Brasil Ltda., a subsidiary of Amyris, oversees the establishment and expansion of Amyris’s production in Brazil. Amyris also has fuel distribution capabilities in the United States through its subsidiary, Amyris Fuels, LLC. More information about Amyris is available at www.amyris.com.

About Embraer

Embraer S.A. is the world’s largest manufacturer of commercial jets up to 120 seats, and one of Brazil’s leading exporters. Headquartered in São José dos Campos, São Paulo, it has offices, industrial operations and customer service facilities in Brazil, China, France, Portugal, Singapore, and the U.S. Embraer designs, develops, manufactures and sells aircraft and systems for the commercial aviation, executive aviation, and defense and security segments. It also provides after sales support and services to customers worldwide. For more information, please visit www.embraer.com.

About GE

GE (NYSE:GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company’s website at www.ge.com. GE Aviation, an operating unit of GE, is a world-leading provider of jet, turboprop and turboshaft engines, components and integrated systems for commercial, military, business and general aviation aircraft. GE Aviation has a global service network to support these offerings. For more information, visit www.geaviation.com.

São Paulo, Brazil — June 4, 2012 – Azul Airlines joined Amyris, Inc. (NASDAQ: AMRS), Embraer (NYSE: ERJ; BM&FBOVESPA: EMBR3) and GE (NYSE: GE) in announcing that Amyris’s innovative renewable jet fuel sourced from Brazilian sugarcane has successfully passed all required testing and will be used during a demonstration flight on an Azul E195 aircraft powered by GE’s CF34-10E engines. The “Azul+Verde” (a Greener Blue) flight will take place in Brazil on Tuesday, June 19th, during the Rio+20 United Nations Conference on Sustainable Development.

Amyris’s renewable jet fuel has been designed to be compliant with Jet A/A-1 fuel specifications and provide equivalent performance versus conventional petroleum-derived fuel in a range of metrics, including fit-for-purpose properties and greenhouse gas emission reduction potential. The feedstock for the renewable jet fuel is sugarcane, a highly desirable biomass that can be produced sustainably in large-scale quantities in Brazil and other tropical countries.

The companies will provide additional information about the flight plans shortly, following authorization from Brazil’s National Civil Aviation Agency (ANAC).

São Paulo, May 14, 2012 – Stratus Group, the leading Brazilian mid-market private equity investor, today announced the listing of its portfolio company, Senior Solution, on the BOVESPA MAIS segment of the BOVESPA exchange. The news marks the first private equity-backed company to list on the AIM or NASDAQ equivalent of the Brazil’s exchange.

Founded in 1996 by Bernardo Gomes and Luciano Camargo, Senior Solution – an IT company which specializes in software provision for financial institutions – received an influential minority investment from Stratus in 2005. The company has approximately 150 clients including the top 10 banks in Brazil. It also counts insurance companies, asset managers and brokerage houses among its clients.

Stratus and BNDES, the Brazilian Development Bank, have supported the Company throughout the years to implement its growth strategy, both organically and by acquisitions. Senior Solution has acquired five other software companies, with complementary products.

Alberto Camões, Managing Partner of Stratus and Chairman of Senior Solution, commented: “As in many other sectors in Brazil, the role of private equity is to foster growth – not only with the supply of capital, but also by supporting the selection and negotiation of targets for acquisition. I feel extremely positive about the company’s continued development as it lists on the BOVESPA MAIS.”

Bernardo Gomes, Founder and CEO of Senior Solution added, “Senior Solution’s public listing on the BOVESPA MAIS marks the initiation of a new stage of the company’s development. We look forward to employing an intense growth strategy to maintain and further develop our position as the leading Brazilian player in the financial software field.”

About Stratus Group

Founded in 1999, Stratus Group is a Brazilian private equity firm focused on mid-market investments. The Group specializes in investment opportunities that are related to growth, sector consolidation and shareholder successions. Stratus’ approach to mid-market investing is organized in two flagship funds and teams: Growth Capital / Buyout (sector agnostic – growth capital injections, consolidations and successions) and CleanTech / Sustainability (businesses related to sustainability, such as the rational use of scarce resources, recycling, renewable sources, climate change mitigation and the local competitive advantages related to Brazilian biodiversity).

Stratus Group’s Growth Capital Fund was named ‘Best Performing Fund’ in the Central and South America region, as measured by the multiple of capital returned to investors, by data provider, Preqin in its ‘Private Equity Performance Monitor 2011’.

For more information: www.stratusbr.com

About Senior Solution

Senior Solution started its operations in 1996 with the goal of developing information technology projects for the financial industry. Currently the company has over 130 customers, including banks, insurance companies and asset managers. Senior Solution offers a complete range of products and services to attend the main need of major financial institutions in the country through four business units. For five consecutive years, Senior Solution was recognized as one of the fastest growing Brazilian companies, in a study published by Deloitte and Exame magazine. The company has acquired five other software companies with complementary products: NetAge, Pulso, Intellectual Capital, Impactools and Control Banc.

For more information: www.seniorsolution.com.br

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In this edition of the Financial Times’ Fund Management weekly supplement, Alvaro Goncalves – CEO of Stratus Group outlines the great opportunity for investors seeking returns in the Brazilian mid-market.

The article can be viewed online at: http://www.ft.com/intl/cms/s/0/9cedc63c-469e-11e1-89a8-00144feabdc0.html

The full text, in Alvaro’s words, is copied below:

Private equity chances in Brazil’s mid-market

By Alvaro Goncalves, CEO of  Stratus Group

Overtaking the UK as the world’s sixth largest economy in 2011, Brazil has a surface area more than twice as big as Europe and a population over three times that of the UK. Since 1990, poverty levels have halved, with 40 million people joining the middle class since 2003. Despite GDP contracting in the third quarter of 2011, the IMF continues to make fluctuating predictions of a GDP growth between 3 and 5% for the coming years.

In a market that continues to be this dynamic, it is easy to see why Brazil has warranted such attention from investors looking for returns in a turbulent financial crisis. And the private equity world has not been exempt from scrutiny. Brazilian private equity has enjoyed a significant renaissance since the late 2000s when international investment managers re-entered the market, attracted by the prospect of strong returns and a proven resilience to the global financial crisis of late 2008. The period saw such landmark events as Carlyle’s first Brazil office opening, Blackstone’s acquisition of Patria Investimentos, JP Morgan’s acquisition of Gavea Investimentos, the establishment of BTG Pactual and Vinci Partners, and the launch of a Brazilian team for TPG Capital.

Despite drawing short of the totals of the other emerging markets comparable to its size, private capital raised by Brazilian private equity funds leapt 500% to over US$3 billion in 2010, driven predominantly by the greater participation from the mega funds. More than 90% of the capital raised in 2010/11 was poured in to only six funds in Brazil, with a few notable examples of billion-dollar plus funds closing in 2011.

Just take a closer look at the resulting evidence: more than 80% of the private capital available in Brazil is chasing deals from among a small pool of only 3000 large companies in the country (those with sales of more than US$200 million). And those few big companies have more alternatives for their capitalization – which means: deal flow tends to be scarce, competitive, and relatively expensive. Conversely, the mid-market private equity sector is underfunded – representing less than 15% of the total private equity money available in the country – with over 14,000 companies with sales of between US$30-200 million representing the sector. The picture is clear: the deal opportunity versus the investment equity ticket available is grossly mismatched.

As a direct result, valuations in the large cap market are rising and the space is becoming overcrowded. Anyone monitoring the Brazilian private equity market could therefore be forgiven for believing the resulting hype that it has reached a critical mass and the opportunities are rapidly disappearing. But institutional investors could benefit from a closer look.

Recalibrate your focus from the large cap onto the mid-market and the opportunity is most certainly still there, and will be there in the long term. Whereas the large companies have an enterprise multiple (EV/EBITDA) around 10x, the middle market firms are showing multiples below 8x, illustrating that they could well be undervalued and have the potential to produce better returns. What is more, the mid-market, as a broader sector of investment, is more resilient, more dynamic, and more mobile. In the Brazilian mid-market, there is an ocean of companies ready to emerge that are underserved and without access to alternative sources of capital. It is probably the sweetest spot – adjusted to underlying risks – for investments in the world today.

The opportunity is best illustrated with examples. Alog Data Centers, a data centre company based in São Paulo and Rio de Janeiro and firmly placed in the mid market, was sold in 2011 following three formal bids to the joint bid presented by Equinix Inc. (a NASDAQ listed data centre company) and Riverwood (a fund based in Menlo Park, California) for 18x capital in dollars (11x in Reais). Later in the year, Maestro, a well-run fleet manager of corporate cars with more than 2500 vehicles, received a control investment with a 50% valuation discount to the market leader.  These markers are silently proving the trend, demonstrating that Brazil is an economy established over an ocean of mid-sized companies. That’s where Brazil can offer a long lasting wealth of opportunities.

Alvaro Gonçalves is Managing Partner and CEO of Stratus Group. He is also an Advisory Council of Empea – Emerging Markets Private Equity Association and Board Member of Lavca – Latin America Private Equity & Venture Capital Association

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Issues also discussed include: why the “capital-market lens” is not the best way to understand the Brazilian private equity opportunity; why Gonçalves believes “it’s very good news” that big international firms and new GPs are joining the competitive fray; why “there’s an ocean of companies that are completely untouched” by private equity in Brazil; why sustainable investing is Brazil’s “convergence of the century”; and why shortage of talent is an issue that keeps Gonçalves up at night. 

For more information, please view the video on Privcap: here. ( http://www.privcap.com/programs/46-convergence-in-brazil )

To gain exposure to the domestic story, investors need to dig below the global LBO activity that has dominated the region, finds Joseph Mariathasan

A decade ago, the stereotypical view of Latin America, as Cate Ambrose, president of the Latin American Venture Capital Association (LAVCA), admits, was of hyper-inflation and political instability. But over the intervening period there have been fundamental changes that, combined with low levels of debt, have left Latin America looking like an attractive investment destination.

“Countries such as Brazil after Lula [President Lula da Silva] are looking very stable, very democratic,” says Ambrose. “Peru, like Brazil, elected a leftist leader, who looks as though he will move to the centre. Columbia has been a success story and former president Alvaro Uribe did a good job cleaning up the drug dealers.”

The growth in the region generally, like that of Asia, comes mainly from expanding domestic demand, a theme that private equity investors have very much taken on board – resulting in returns less dependent on the stuttering economies of the developed world.

Trend

This trend is underpinned by favourable demographics. According to Karin Hallin, who heads the São Paulo office of Partners Group, in 2010, more than 50% of the continent’s population was below the age of 30 and close to 50m people are forecast to join the economically active population by 2020. This would lead to higher demand for a wide range of consumer products.

While GDP growth in Latin America is supported by the growth of domestic demand, this is not reflected in the composition of the public equity markets, which are dominated by commodity companies. As Hallin points out, 46% of Brazil’s Bovespa index market capitalisation is commodity-related, but this is the case for only 12% of Brazil’s real economy. The listed markets are also highly concentrated, with the 10 largest companies in Mexico accounting for 75% of the public equity index, for example. Private equity investments can offer much purer exposure to domestic consumption growth.

But while Latin America might be a convenient geographic designation, it masks a huge variation in investment opportunities – Brazil at one end represents a self-contained, dynamic universe for private equity investors, while at the other, Cuba, Venezuela, Bolivia and a host of others do not register at all.

Brazil itself is a relatively closed economy: “Brazil’s exports account for 10% of GDP versus China at 29% and India at 18%, which means that the economy is driven by internal demand and less dependent on global growth,” says Hallin. And while the sheer size of Brazil’s economy and population makes it stand out, that, as well as its Portuguese language, renders it quite separate from opportunities elsewhere in the region.

“Brazil has such enormous opportunities that Brazilian private equity firms are completely focused domestically, while Brazilian pension funds are investing large amounts into private equity,” Ambrose notes.

The local pension funds have played an active role in the development of the private equity industry over the past decade, although Ambrose points out that their requirement for a seat on general partners’ (GPs) investment committees has created a governance conflict and acted as a deterrent to international limited partners (LPs) investing with Brazilian managers that have pension fund commitments.

Inevitably there is some interplay between Brazil and its neighbours. Alvaro Goncalves, CEO of Brazilian private equity firm Stratus and a LAVCA board member, points to one fund in Colombia that specialises in investing in companies expanding from Colombia into Brazil.

“In the mid-market space, many Argentinian agricultural companies are moving to Brazil,” he adds. “Grain companies in Argentina are more professionally run, as ownership of land is usually separate from the management of the companies. In consumer goods, we see movement in the opposite direction as Brazilian companies move to Argentina, Colombia and Mexico.”

Ambrose notes that many global firms are looking for regional opportunities, as this gives access to deals flowing across multiple countries and offers portfolio companies the ability to develop across a wider geographic region.

Ambrose picks out Mexico, Peru, Colombia and Chile as the major ex-Brazil private equity markets, with Argentina, Costa Rica and Uruguay making up a second tier. Many investors prefer Mexico over Brazil because its markets have not overheated – security issues have clearly frightened off some investors. She also likes Costa Rica, despite it being dragged down by drug traffickers.

Promising

The annual LAVCA Scorecard ranks business environments for private equity and venture capital activity of 12 countries in Latin America based on indicators including taxation, minority shareholder rights, restrictions on institutional investors, entrepreneurship and capital markets development.

Chile, Brazil and Mexico lead the 2011 rankings. The other major economy, Argentina, continues to struggle to develop a viable private equity or venture industry, despite its strong entrepreneurial community and increased interest from global investors. It ranks tenth in the region, tied with El Salvador and is above only the Dominican Republic.
The LAVCA indicates the industry in Argentina will continue to be constrained due to the perception of high political risk, legal uncertainty and a complex, high tax environment. The lack of a specific regulatory framework for private equity and underdeveloped capital markets are also significant hurdles.

Among GPs, Partners Group considers Chile and Colombia as the most promising investment destinations after Brazil, with the outlook for Peru dependent on political and economic continuity after president Humala’s election. In the longer term, its also likes the potential in Mexico.

So what kind of deals get done in the region? Unlike in developed markets, financial engineering has had little impact on private equity in Latin America, primarily because debt was not readily available and is generally too expensive in the region. Despite this, fund-raising has been dominated by global firms financing large buyouts, according to Goncalves.

“There has been a mismatch between the fundraising and the opportunities, which are predominantly in the small and mid-market sector,” he says. “As a result, the deal activity has been low, with capital sitting on the sidelines.”

Brazil, in particular, has attracted too much capital for large buyouts, he says, whereas in Colombia some mid-market firms have been raising capital in an organised manner. “This helps the ecosystem as it is very difficult if you only have one extreme, says Goncalves.”

Local private equity firms are more focused on the small and mid-market sectors, with the primary driving force being the operational improvements that private equity firms have been able to add to often family-owned businesses as they grew beyond the capabilities of the initial founders. That is very much the strategy for Brazilian firm GP Investimentos, for example. Similarly, global emerging markets specialist Aureos Capital focuses on companies smaller than $100m (€75m), investing up to $10m in the first round of financing.

“Typically we are buying a minority stake in a family-owned business which the founder has run in an informal manner to take it to a certain stage,” as Erik Peterson, managing partner for Aureos Latin America, explains. “At some stage, he wants to monetise his equity and get the business to run more professionally. We introduce better corporate governance with a board of directors receiving timely information. Then, on a strategic level, we help the firms to expand rapidly through thinking of ways to find financing, and so on.”

Goncalves agrees that a company founder is the engine and visionary of a firm, but also often a “limitation on its growth”. Private equity firms can help dilute the position of the founder in a friendly manner, as well as dealing with generational succession in family-owned firms.

Aggressive

And the exit routes? For Aureos, the initial strategy for exit is invariably a strategic sale. This used to be sales to large US or European companies, but is increasingly shifting to local strategic purchasers. There are also some companies with the growth potential to enable them to become large enough to list publicly – predominantly in Mexico and the Andean region of Chile, Colombia and Peru, according to Peterson.

At the larger end of the market, private equity firms can help a company to grow large enough to list. Goncalves says this consists of two steps. “We first complement the management teams, fine tune the business plans and implement corporate governance. The second stage is the implementation of the business plan through adding on acquisitions, for example. Often the non-availability of capital has prevented consolidation in the industry.”

As an example, Stratus took a $40m investment in Brazilian polyester fibre firm Unnafibras in August 2010, with a clear mandate of getting the company ready for IPO within 12-24 months. Despite being the largest player in its industry it still has only 15% of the Brazilian market. Stratus worked with Unnafibras to develop a five-year strategic plan aimed at boosting its position in the marketplace, both by doubling production capacity with two new recycling plants and by identifying potential acquisitions of direct competitors, as well as businesses with different niches.

GP Investimentos goes even further in its approach to helping management, in some cases installing one of its partners as part of the management team, according to director of investor relations Raymond Trad.

One example was BRMalls, one of the largest integrated shopping malls in Brazil. GP installed one of its partners as CEO and implemented an aggressive M&A strategy, increasing ownership from seven to 32 malls and administration from 24 to 25, transforming the firm into the largest player in the sector within a year. Six months after the deal, the company went public at an implied valuation of 2.5 times the initial investment.

Asia might still be delivering higher GDP growth than any other region in the world but Hallin points out that Latin America should post a superior growth performance to the developed economies.

The IMF expects Latin America to grow by 4.5% and 4% in 2011 and 2012 respectively. Private equity investment is well positioned to take advantage of that, providing funds focus on the growth of domestic demand and are not reliant on exports to an increasingly risky developed world.

Author: Joseph Mariathasan

According to the report, Brazil’s economy has surged because of vast reserves of natural resources and a rapidly growing, cash-rich middle class.

The story is reported by the Financial Times, read more at:

http://blogs.ft.com/beyond-brics/2011/12/26/brazil-moves-up-a-place-in-gdp/#axzz1heq8aHzh

The video below was produced by ‘FT Business’ highlighting the ‘Capital Impact 2011’, with short interviews with global leaders of PE. Alvaro Gonçalves, Managing Partner of Stratus Group and Luciana Dias, Commissioner from Securities & Exchange Commission, Brazil – CVM, were 17^th and 12^th in the series, offering their insights on Brazil.