Mahindra Satyam buys 51% stake in Brazilian firm Complex IT

Mahindra Satyam Ltd, a part of the $15.9 billion Mahindra Group, has acquired 51 per cent stake in Brazil-based Complex IT, a provider of consultancy services on SAP’s business management software.

Although the exact deal value could not be immediately ascertained, Arvind Malhotra, Mahindra Satyam’s head of Latin American operations, told Reuters the company had initially paid $6.5 million and would be paying a total of $20-23 million over an 18-24 month period, based on certain pre-agreed milestones being achieved. It also has the option to buy out the remaining 49 per cent stake, according to Malhotra.

Mahindra Satyam, which has the sovereign wealth fund of Abu Dhabi among its institutional shareholders, is a global business consulting and IT services company, offering supply chain management, enterprise solutions, business intelligence and more. The company has development and delivery centres in various countries such as the US, the UK, Canada, Brazil, France and Hungary, among others.

Established in 1998, Complex IT is a full service SAP consulting services provider with more than 500 consultants and 120-plus clients. Headquartered in Sao Polo, Complex IT has offices in Rio de Janeiro and Porto Alegre.

Mahindra Satyam said the current deal would provide it further leverage on developing solutions for the rapidly expanding enterprise solutions market in the Latin American country. It will now focus on large players in the manufacturing, financial and consumer services segments.

Brazil is the second fastest growing geography for the German company SAP AG and its software revenues grew 20 per cent last year. The current IT spending by Brazilian companies is approximately $70 billion, with $36 billion being spent on services and software.

“The BRIC (Brazil, Russia, India and China) countries has the potential to achieve leadership position in the global economy, and Mahindra Satyam and Complex IT will contribute significantly to this strategic vision,” said Antonio Rossi, chairman and CEO of Complex IT.

Last March, Tech Mahindra announced a proposal to merge Mahindra Satyam with itself in a deal valued at $1.4 billion, three years after acquiring a strategic stake in the company. But the merger has not been completed yet and Mahindra Satyam continues to be a separate listed firm.

This is the second majority stake acquisition by Mahindra Satyam after the management change, following an accounting scandal four years ago. Last year, it acquired the international operations of VCustomer Services India Pvt Ltd for $27 million. It had also picked a minority stake in Dion Global Solutions Ltd for $7 million in 2012.

(Edited by Sanghamitra Mandal)

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