June 26, 2020 / 12:34 PM / 19 days ago

UPDATE 1-Brazilian drugstore chain Pague Menos files for $224 mln IPO

(Adds IPO size, details)

By Carolina Mandl and Tatiana Bautzer

SAO PAULO, June 26 (Reuters) - Brazilian drugstore chain Empreendimentos Pague Menos SA has filed for an initial public offering on the Sao Paulo-based stock exchange, according to a securities filing on Thursday.

The total size of the issue, including capital raised by the company and shareholders, may reach 1 billion reais to 1.2 billion reais ($223.92 million), two sources with knowledge of the matter said, asking for anonymity to disclose private discussions.

The drugstore chain, which is backed by private equity firm General Atlantic LLC, is mainly seeking proceeds to fund its growth, as it sees some opportunities to expand its chain amid the coronavirus pandemic. As of the end of March it had 1,124 stores and has planned an initial public offering for years.

General Atlantic will not sell shares in the IPO, while controlling shareholder family Queiros may offer investors part of the stake it holds.

Pague Menos posted first-quarter revenues of 1.76 billion reais and net income of 9.2 million reais in the first quarter.

Investment banking units of Itau Unibanco Holding SA, Credit Suisse and XP Inc, among others, will manage the offering.

The company is expected to price the IPO between August and September, the sources added. ($1 = 5.3590 reais) (Reporting by Carolina Mandl and Tatiana Bautzer; editing by John Stonestreet and Chizu Nomiyama)

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