Mills floats on Brazilian stock market and plans expansion
By Murray Pollok04 May 2010
Brazilian scaffolding, shoring and equipment rental business Mills Estruturas e Servicos de Engenharia (Mills) has raised R$686 million (€300 million) in a flotation on the Sao Paolo Stock Exchange.
The company, which is best known for its scaffolding and aerial platform rental businesses, said it would use around 60% of the proceeds to invest in new equipment for its business, with the remaining 40% held for acquisitions.
Mills' business also includes an R$54 million revenue aerial platform and telehandler rental division, Mills Rental.
Mills said its rental division more than doubled its revenues in 2009 and that there were further opportunities to grow based on Brazil's enormous investment plans. There is a government infrastructure investment plan valued at over R$500 billion; a housing programme calls for over R$35 billion in investment; and the 2014 World Cup and 2016 Olympic Games will require for a further R$110 billion in spending.
The company quoted industry sources stating that there are only 7400 aerial platforms and less than 400 telehandlers working in Brazil. "We believe that the prospects for long-term growth for Rental Division are strong", said the company in its prospectus for the Initial Public offering (IPO).
The background to the Mills rental business is complicated. In the 90s it was a joint venture with JLG Industries. However, Mills sold the rental division to Sullair Argentina five years ago, who subsequently renamed it Solaris. After the expiry of a non-compete agreement with Sullair, Mills again established a rental business in Brazil under the Mills Rental name. Solaris remains its largest competitor in the aerial platform/telehandler market.
Mills was founded in 1952 by the Nacht family and Andres Cristian Nacht has been chairman since 1998. He remains a major shareholder of the business. Total group revenues in 2009 were US$264 million.
The company's shares are traded on the Sao Paulo stock exchange under the symbol MILS3.SA. Its shares opened on 16 April at R$11.5 and at close of trading on 3 May were valued at R$11.7.