Cap Gemini SA will buy a 55 percent stake in Brazilian information technology provider CPM Braxis as it seeks to serve more corporate clients in the South American country.
Cap Gemini, Europe’s largest computer services provider, will pay about 233 million euros ($298 million) for the stake, with an option to acquire the remaining 45 percent, the company said today in a statement. CPM Braxis predicts it will have revenue of about 450 million euros this year, Cap Gemini said.
“We have big clients who want to develop in Brazil, where we were a bit weak to follow through,” Cap Gemini Chief Executive Officer Paul Hermelin said on a conference call with reporters today. “With this operation, we become the leader in the Brazilian market.”
Computer services companies are looking to expand into emerging markets as rivals from India push further into Europe and North America. Azim Premji, the chairman of Bangalore-based Wipro Ltd., said in April that “large deals are very much on the table” in markets including Europe and the U.S.
The CPM Braxis purchase is larger than recent acquisitions by Paris-based Cap Gemini, which has focused on small companies to add technology offerings. In July it bought Sweden’s Skvader Systems AB, a provider of “smart meter” energy services, for an undisclosed amount.
Cap Gemini gains “a strong platform for Brazil” by acquiring CPM Braxis, Laurent Daure, an analyst at Kepler Capital Markets, said in a note to clients. “Following the transaction, Cap Gemini should still have 1 billion euros of net cash by year-end, and still room for another potential deal.”
Hermelin said in May that the company was looking at “lots” of acquisition targets as demand rebounds for information services.