(Bloomberg) -- Uruguay’s first initial public offering under streamlined regulations introduced two years ago is expected to launch in late June, testing investor appetite for the South American country’s tech sector. 

Zorzal Inversiones Tecnologicas SA will sell as much as $15.5 million in shares, which it will use to buy minority stakes in at least five profitable local tech companies with annual sales of $3 million or more, said Jaime Miller, general partner at Montevideo-based investment banking firm Capital Oriental that is structuring the IPO and will also run Zorzal.   

“We have an industry with a lot of companies that are growing, profitable with good cash flow and there are people abroad who want to buy them,” said Miller. “This issuance is very much targeted to retail investors at brokerage houses.”

Read more: Uruguay Central Bank Approves First Simplified IPO for $15.5M

Uruguay’s stable politics and economy plus generous tax breaks have created a $2.8 billion tech industry that punches well above its weight in the region. This country of 3.4 million people wedged between Argentina and Brazil had the highest per capita IT exports in South America in 2022, according to data compiled by export promotion agency Uruguay XXI. 

Zorzal will pay shareholders a dividend — companies that sell a stake to Zorzal must agree to pay it a dividend of at least 7% on the invested capital — and offer them the opportunity for stock price appreciation as portfolio companies grow or are acquired, Miller said.

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