TOM HICKS KNOWS HIS WAY AROUND A BUSINESS DEAL. BUT discussing it in Spanish is another matter. "I took about 30 hours of lessons:' he says. "But I've concluded that I'm better off relying on my Latin American friends to speak English, because their English is always better than my Spanish!'
He must have some pretty good friends. Since 1996, his Dallas-based firm, Hicks, Muse, Tate & Furst, has plowed almost $2 billion in private-equity funds into 15 different companies, becoming the most aggressive financier in Latin America. And he's just getting started: Later this year, he hopes to raise $1 billion for another round of acquisitions.
"The opportunities are great, and the reason the opportunities are great is the capital markets right now are worried about the region:' says the 53-year-old Texan, speaking to LATIN TRADE from his jet on his way to meet with an investor. "But we think the region will recover over the next couple years, and we think we'll be very well positioned."
Investors put a lot of stock in what Hicks thinks. Since starting his firm 10 years ago, he's raised more than $11 billion worth of funds that have invested more than $35 billion in leveraged acquisitions, becoming one of the most active private investment firms in the United States.
Hicks started his southern descent in January 1996, opening an office in Mexico City and hiring investment bankers Cesar Baez and Miguel Noriega as well as former U.S. Ambassador to Mexico John Gavin to scout for deals. Over the next year and a half, the firm spent $95 million for stakes in three companies. Then, in late 1997, Hicks did his first big deal: the $120 million acquisition of Grupo MVS, the number-two pay-TV concern in Mexico after Televisa's Cablevisi6n.
Bidding on bankrupt companies. "We started in Mexico because of the proximity to our base in Texas and our belief that Nafta [the North American Free Trade Agreement] was going to really open up cross-border trade:' he says. "And that's exactly what happened!'
His team spent the next year bidding on bankrupt companies--everything from media outlets to manufacturing plants--being auctioned off by government bailout agency Fobaproa. Despite coming close on a couple, Hicks came away from the fire sale empty handed.
"At the end of the day, the families that ran these companies into the ground were able to get the Mexican government to let them maintain control on a basis that made no sense to us," he says. "We're just not going to waste our time looking for more until the government changes its approach."
So Hicks turned his sights farther south. He bought 60 different cable systems in Argentina for $100 million, or about $800 per subscriber. But then a year later, Cablevision, controlled by Argentine media concern CEI Citicorp Holdings, offered to buy his cable interests for $225 million, or $1,300 per subscriber. Needless to say, he jumped at it.
Then a funny thing happened. Hicks acquired control of CEI by buying stakes owned by Citicorp's Citibank and Republica Holdings' Raul Moneta. So Hicks in effect bought back the 60 cable systems he sold so handsomely just a few years ago, as well as a lot of other rich assets, including TV, radio and sports programming. "So we now control over 70% of CEI, which gives us the ability to try to pursue a pan-regional strategy," he says.
Hicks already has some of the pieces in place. In Venezuela, he owns part of pay TV company Intercable and has a partnership with Gustavo Cisneros of the Caracas-based Cisneros Organization, which owns interests in broadcast TV radio and programming. And in Brazil, he was part of a group that paid $120 million last year for two-thirds of Brazilian pay-TV companyTV Cidade. "Our vision is we'd like to see these things all come together, and we're working very hard to do that," he says.
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|Date:||Oct 1, 1999|
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