The company, which counts private equity firm General Atlantic as its largest shareholder, has enlisted Morgan Stanley to assess interest from potential acquirers, including private equity firms and larger financial technology providers.
While discussions are still in the preliminary stages, no deal is guaranteed. DLocal’s shares rose nearly 14% following the news, though they later retraced some of those gains. This isn’t DLocal’s first attempt at a sale. The company reportedly initiated a similar process last year but talks fell apart due to disagreements over financial terms with potential buyers. Both DLocal and Morgan Stanley declined to comment on the ongoing discussions.
DLocal operates in multiple regions, including most of Latin America, parts of Africa, and Asia. Its customer base features high-profile clients such as Amazon, Microsoft, and Google. Despite its broad geographic reach, the company has faced challenges in 2023.
Its shares, which have traded on the New York Stock Exchange since its 2021 initial public offering, have fallen 33% year-to-date before the recent rebound. The decline has been attributed to weaker currencies in emerging markets, reduced cross-border payment volumes, and competition in the fintech sector.
Nevertheless, DLocal posted a 5% increase in gross profit in its most recent quarterly earnings. This growth was supported by improved payment volumes in certain markets, though challenges such as market share losses in Brazil’s credit card segment and higher expatriation costs in Argentina persist.
The payments industry has experienced significant consolidation as firms navigate post-pandemic realities. Falling valuations have made companies like DLocal attractive targets. Earlier this year, Advent International acquired Canada-based Nuvei in a USD 6.3 billion deal.
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