OMG is thrilled to share significant developments in our role as Dominican counsel to INICIA, successfully navigating a dual-aspect transaction encompassing both financing and mergers & acquisitions. This accomplishment reflects our commitment to providing comprehensive legal counsel and strategic insights.

Project Financing (Deal Date: January 16th, 2024)

OMG acted as INICIA’s Dominican Republic counsel in a financing for up to USD 330 millions, to Gerdau Metaldom, S.A., Four Bells Resources Inc., and Diaco Pamco SPV 1, S.A., by Citibank, N.A (Puerto Rico Branch) International Banking Entity, Citigroup Global Markets Inc., The Bank of Nova Scotia, and Banco Popular Dominicano, S.A. – Banco Múltiple, Banco Latinoamericano de Comercio Exterior, S.A., to repay certain outstanding commercial indebtedness and to finance the acquisition of shares in Gerdau Diaco S.A. (and subsidiaries), and in Gerdau Metaldom Corp. (and subsidiaries), joint ventures operating in the markets of Colombia, Dominican Republic, Panama, and Costa Rica. This transaction was carried out via INICIA’s investment fund dedicated to the construction materials industry.

Our legal team had to advise and negotiate with all the parties involved in the deal to close the transaction within a limited timeframe while considering all legal and regulatory material aspects of the acquisitions that were being negotiated in parallel.

OMG regularly advises on acquisition financing transactions across a wide range of sectors in the Dominican Republic market. The OMG deal team included our partners Leonel Melo & Esperanza Cabral, senior associate Aldana Fernandez, and associate Alejandro Lama.

Merger & Acquisition (Deal Date: January 17th, 2024)

OMG acted as Dominican counsel to INICIA in a deal in which it entered into definitive binding agreements to acquire the totality of Gerdau’s 49.85% equity interest of the joint venture Gerdau Diaco S.A. (and subsidiaries), and its 50.00% equity interest of the joint venture Gerdau Metaldom Corp. (and subsidiaries).

The assets held by joint ventures comprise industrial facilities dedicated to long steel production with capacities of 360 thousand tonnes of meltshop and 1,250 thousand tonnes of rolling mill. During the past 6 years, the average combined EBITDA of both operations totaled US$ 134 million.

The transaction was complex as it involved joint ventures with operations in 4 countries, including 2 jurisdictions requiring antitrust approval. OMG’s team advised on tax structure for the deal and participated in the negotiation of the definitive documents.

Our legal team, led by partners Leonel Melo, Esperanza Cabral, Gloria Gassó, and Ana Taveras (Tax), alongside senior associates María Alejandra Gómez, Alexander Troncoso, and Nathalie García (Tax), played crucial roles in navigating the complexities of the transaction.

The definitive agreements for the financing and transaction were signed on January 16th and 17th, respectively. The closing of a part of the transaction was confirmed on February 1, while the part of the transaction that involves the Colombian companies is subject to regulatory authorization from the Colombian competition entity, projected for this semester. INICIA, our valued client, remains focused on sustainable growth, and OMG takes pride in contributing to the realization of their strategic objectives.

INICIA press release:

https://www.linkedin.com/posts/iniciaoficial_comunicado-activity-7153897099976146944-SVLh?utm_source=share&utm_medium=member_desktop

Gerdau press release:

https://ri.gerdau.com/en/notices-and-results/notices-press-releases-and-material-facts/