Financing Innovation of the Year - Vista Oil & Gas
January 17, 2018 | Aaron Weinman
The energy firm secured commitments from a wide array of investors to price an oversubscribed IPO and introduce a new asset class to Latin America
IPO M&A Mexico Colombia Brazil
Vista Oil & Gas jumped on an improved equity market to raise $650 million in an IPO. In the process, the Mexican-based company introduced a new asset class to Latin America – the special purpose acquisition company, or SPAC.
Drawing on support from energy-focused private equity fund Riverstone, Vista’s goal remains to run as a self-managed entity rather than be just one part of the fund’s portfolio.
With former YPF chairman and CEO Miguel Galuccio at the helm, the SPAC listing proved to investors that Vista comes with the experience required to tackle Latin America’s oil and gas space.
“We want to create a Latin American champion,” Galuccio tells LatinFinance. “The SPAC structure served our purpose because our vision is to build a company that becomes a regional player.”
In its goal to become pan-regional, Vista is eyeing assets in Argentina, Mexico, Colombia, and Brazil. It convinced investors to bet on an untried asset class and completed one of the largest SPAC IPOs in history, making it LatinFinance’s Financing Innovation of the Year.
Galuccio, also a board member at oil services provider Schlumberger, is aware of the danger involved with doing something new. But anything innovative in Latin America cannot come without some semblance of risk.
To mitigate potential hazards, Vista obtained support from Mexico’s securities regulator CNBV, its stock exchange BMV and CONSAR, the authority that oversees the country’s pension funds, or afores. “Mexico’s authorities welcomed this new initiative and recognized the chance to put a new asset class in place,” Galuccio adds.
Underwriters conducted a three-week roadshow and increased the IPO by 30%. Vista snared commitments from traditional international energy and SPAC buyers, Latin American-dedicated funds and Mexico’s afores.
And Riverstone, itself no stranger to oil and gas investments, provided $100 million in aggregate support.
Vista’s innovative approach was born out of a desire to become more than just an investment entity. In Galuccio’s words, the SPAC IPO creates a “company that will last” and gain market recognition.
“We are not a company to be flipped or that will change hands,” he says. “The key is innovation, not only in how we raised money, but we are saying to the market that we want to change the game.”
Afores are hungry for new investment instruments while Mexico’s BMV yearns for more liquidity. Vista has given them just that and set a new benchmark. In December, Mexican investor Promecap filed documents for the country’s second SPAC IPO. LF