Arezzo Industria e Comercio SA

“Azzas 2154 owns genuinely durable franchise brands — Arezzo, Schutz, FarmRio — inside a capital-light model that earns real returns at the brand level, but the Hering acquisition introduced balance sheet risk, ROIC compression, and a governance rift between the two founding families that collectively prevent high conviction. At 5-6x EV/EBITDA and 0.35x revenue the price is undeniably cheap, and the Birman family's R$100M open-market purchase signals insider conviction, but cheap is not sufficient when the central risk is governance dysfunction that could impair the cultural brand equity at the thesis' core. A 3-4x BRL return over a decade is achievable if Hering stabilizes, FarmRio's international expansion continues, and governance normalizes — three interdependent conditions, none yet proven — making this a compelling watch rather than a high-conviction position.”