Paychex Expands into Latin America through Joint Venture with Semco Partners
Paychex-Semco Partners joint venture will offer payroll and HR services to
small businesses in Brazil starting in early 2014
ROCHESTER, N.Y. -- August 20, 2013
Paychex, Inc., a leading provider of payroll, human resource, insurance, and
benefits outsourcing solutions for small and medium-sized businesses (SMBs),
and São Paulo-based Semco Partners today announced a joint venture agreement
to expand Paychex’s services into Brazil.
Semco Partners is a portfolio management and investment company with a proven
track record of helping market-leading businesses successfully enter the
Paychex president and CEO Martin Mucci says Paychex’s decision to expand its
payroll and human resource services business into Brazil represents a key
component of Paychex’s growth strategy: product expansion through new markets.
“Brazil is the right place for Paychex’s first Latin American expansion for a
number of reasons. It has a vibrant market of approximately five million small
businesses that account for about 40 percent of the wages paid in Brazil.
Also, recent and upcoming regulatory changes there increase the opportunity
for outsourcing payroll and other HR services,” Mucci says. “The availability
of an experienced partner in Semco that has helped other U.S.-based businesses
enter the Brazilian market means we begin with valuable knowledge of the
“Brazil’s small- to mid-sized business market is underserved in many ways,
despite a lot of outsourcing activity at larger companies,” Semco Partners
managing partner and CEO Alexandre Bonfim de Azevedo says. “We identified the
SMB sector as having considerable potential. In fact, a wave of regulatory
changes is building positive momentum for outsourced payroll services to make
real headway in the market.
“With industry-leading expertise, Paychex is the perfect company to capitalize
on this opportunity,” Azevedo adds. “Our research disclosed their interest in
international expansion, which dovetailed wonderfully with our strategy: to
identify business opportunities in Brazil and match those opportunities with
the top players in each field worldwide. Paychex’s expertise, commitment, and
dedication to our joint venture make them an ideal partner.”
“In Brazil, the majority of payroll service outsourcing in our target market
is provided by certified public accountants,” says Mucci. “Since Paychex was
founded more than 40 years ago, our company has had a tradition of valued
partnership with the accounting community in the U.S. We look forward to
developing an equally strong relationship with CPAs in Brazil through this new
Paychex plans to begin operations in São Paulo, Brazil, in the first quarter
of 2014. The joint venture in Brazil represents Paychex’s second international
operation. In spring 2004, Paychex expanded into Germany, where the company
currently serves more than 2,300 clients.
The Paychex-Semco Partners joint venture has identified an in-country general
manager for Brazil who will report to a four-member board of directors.
Paychex board members will be Paychex senior vice president and chief
financial officer Efrain Rivera and Paychex senior vice president of service
John B. Gibson. Semco Partners board members will be the partners Michel
Harari and Alexandre Bonfim de Azevedo.
Similar to other Semco Partners joint ventures, the intention of the agreement
is that Paychex will acquire Semco Partners’ half of the partnership and
create a wholly owned subsidiary of Paychex. In Semco Partners’ business
model, this typically occurs five to 15 years after creation of the joint
Paychex, Inc. (NASDAQ: PAYX) is a leading provider of payroll, human resource,
insurance, and benefits outsourcing solutions for small- to medium-sized
businesses. The company offers comprehensive payroll services, including
payroll processing, payroll tax administration, and employee pay services,
including direct deposit, check signing, and Readychex^®. Human resource
services include 401(k) plan recordkeeping, section 125 plans, a professional
employer organization, time and attendance solutions, and other administrative
services for business. A variety of business insurance products, including
group health and workers' compensation, are made available through Paychex
Insurance Agency, Inc. Paychex was founded in 1971. With headquarters in
Rochester, New York, the company has more than 100 offices serving
approximately 570,000 payroll clients as of May 31, 2013. For more information
about Paychex and our products, visit www.paychex.com.
About Semco Partners
Founded by international management icon Ricardo Semler, Semco Partners is
theleader in bringing global corporations into Brazil. Semco Partners is not
an advisory firm nor a consultant; it is an equal joint venture investor with
top multinationals who want to enter the Brazilian market with support,
knowledge, and experience. Semco Partners reduces the risk of launching
business in Brazil and helps to accelerate the start-up phase. Semco Partners'
current joint ventures and technological partners in Brazil include H&R Block,
Pitney Bowes, Sulzer Chemtech, Cem-tec Corporation, and Lödige. Former
partners include Johnson Controls, Cushman & Wakefield, RGIS, ERM, and
Philadelphia Mixing Solutions. For more information about Semco Partners,
Stay Connected with Paychex
Photos/Multimedia Gallery Available:
Laura Saxby Lynch, 585-383-3074
Director, Corporate Communications
For Semco Partners:
Fred Iannotti, 802-318-5531
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