Brazil Insurer Porto Seguro Eyes Partners for Health Business, Sources Say

Brazilian insurance group Porto Seguro is in talks with private equity funds to possibly sell a minority stake in its health business, with discussions focusing on the strategic advantages of potential partners and valuation, two people familiar with the talks said.

Porto Seguro, which has not made a final decision about a potential deal, is considering selling a part of the health insurance division that would come with a seat on the board, which would mean at least a 5% stake, one of the sources said.

In response to a report by Brazilian newspaper Valor Economico about the talks, Porto said in a statement on Wednesday that it is always open to discussing the interest of potential investors, but no bids have been signed.

U.S.-based private equity firm Summit Partners is one of several prominent investors in discussions with Porto Seguro, due to its expertise in technology and artificial intelligence, according to the sources.

Summit Partners did not immediately respond to a request for comment.

In a note to clients, investment bank UBS BB said that a new minority partner in Porto’s health vertical, while not essential, could accelerate expansion efforts.

Based on press reports, net income estimates and valuations of other players in Brazil, UBS BB estimated the value of Porto’s health unit at up to 6.5 billion reais ($1.1 billion).

(Reporting by Luciana Magalhaes; editing by Brad Haynes and Jane Merriman)