Payments processor StoneCo Ltd., which counts Warren Buffett among its top investors, said it signed a definitive agreement to combine business with Brazil software firm Linx SA for about $1.1 billion. The deal will be implemented through a merger of shares in a cash-and-stock transaction, Stone said in a filing after markets closed. The base exchange ratio represents a total of 33.7625 reais ($6.3) for each Linx share, valuing the company at more than 6 billion reais. In a separate filing, Stone said it’s planning a $1 billion share offer to finance the acquisition. The transaction is subject to approval by Brazil’s antitrust regulator and Linx’s shareholders, according to the filing. The combination “makes sense as it marries the hardware, software and services that on-line and store-based retailers need, especially for omnichannel success,” Bloomberg Intelligence analyst Julie Chariell wrote before the deal was confirmed. In addition to boosting the number of clients, a combination between the firms could help them “reduce churn by improving loyalty,” Bradesco BBI analyst Victor Schabbel wrote in a note.

https://www.bloomberg.com/news/articles/2020-08-11/buffett-backed-stoneco-brazil-s-linx-jump-on-potential-tie-up