Totvs acquires TotalBanco and strengthens financial area
Valor Econômico
Totvs, the biggest software company of Brazil, took the control of TotalBanco, specialized in programs and services for the financial sector. The value of the deal may get to nearly R$ 23 million (US$ 13.4 million). Pursuant to the agreement, Totvs acquired 70% of the total capital of TotalBanco for the equivalent to 5.5 times the EBITDA (Earnings before interest, taxes, depreciation, and amortization) of the company foreseen for 2009, which amounts to R$ 2.8 million (US$ 1.63 million). Besides that, it acquired the right to purchase the other 30%, after 2011, for the amount of up to R$ 12.2 million (US$ 7.1 million). The value is conditioned to the meeting of goals by TotalBanco. The acquisition will be paid in cash, with own funds, informs José Rogério Luiz, Totvs Executive and Financial VP and Investor Relations Officer. The negotiations started more than 18 months ago.
With the acquisition - the most recent of a long list -, the company intends to strengthen the offer of products for the financial sector, gathered around the Totvs Financial Services division. Totvs opened room in this area when it purchased the rival Datasul, in July last year. With the deal, Totvs inherited the products of the brands YMF and Tools that had been acquired by Datasul. In the case of YMF, in September this year Totvs acquired the other 20% of the business, taking over the entirety of the capital.
The products of TotalBanco complete the already existing line and increase Totvs possibilities in the dispute for the business dealings with small and medium size banks, affirms Jose Rogério Luiz. "The companies of the financial sector are used to invest in the creation of their own programs, but buying ready-for-use software, whose cost is lower and the update is more frequent, is starting to become more popular", says the executive.
TotalBanco has 150 employees, who will become part of Totvs team, with 5 thousand direct employees, besides the 4 thousand that work in its franchises. The net earnings foreseen for TotalBanco for the year amounts to R$ 17.8 million (US$ 10.3 million).