Cap Gemini SA Friday said it had acquired a stake in Brazilian based reseller, CPM Braxis. The purchase, pegged at 194 million UK pounds, will see Cap Gemini acquire 55 per cent stake in CPM Braxis. The Brazilian firm employs about 5,500 individuals and expects a turnover of 375 million pounds this year. CPM Braxis is a specialist in financial clients and before the acquisition, it boasted bank Bradesco as its largest shareholder.

Cap Gemini said it expects the deal to enable it expand its foothold in Brazil and as well enable it support its existing clients that have interests in Brazil. Other than that, Cap Gemini also hopes the deal will enable it increase its management team. The Brazilian firm expects its revenue to increase by 20 per cent in 2010, with its current margins of about six per cent. However, the deal allows Cap Gemini to have the option of buying all of the remaining shares in CPM Braxis in a period of three to five years after the closure of the deal.

The deal makes Brazil Cap Gemini's sixth largest country by headcount with 6,200 staff. CPM Braxis is a provider of information technology and the move, as stated by Cap Gemini, is targeted at serving additional corporate clients in the country. Cap Gemini is Europe’s biggest computer services provider and according to Paul Hermelin, Cap Gemini chief executive officer, said the firm has major clients keen on developing in Brazil, but the firm was somehow weak to follow through with the investments.

However, with the acquisition of CPM Braxis, Cap Gemini expects to become a leader in the Brazilian market. Paul Hermelin was speaking during a press conference with reporters Friday. The move, analysts believe is typical of major computer firms that are keen on foraying into emerging markets, such as Brazil’s, as Indian players foray into Europe and North America. With that in mind, large deals are definitely on the table for emerging markets, reiterated analysts.

Hermelin had said earlier in May that the company was looking at “lots” of acquisition targets as demand rebounds for information services. The Paris based Cap Gemini has recently been on the acquisitions trail, but the CPM Braxis acquisition comes as the largest of all its acquisitions. The French firm has focused on small companies as its acquisition targets in a bid to add technology offerings to its portfolio.

3 Sep 2010.