Capgemini buys majority stake in Brazil IT group

PARIS, FRANCE: Europe's leading information technology group Capgemini is buying a 55 per cent stake in Brazilian peer CPM Braxis for 233 million euros ($298 million) to expand in high-growth emerging markets.

“This deal will allow us to become leaders on the Brazilian market... Brazil has very strong potential, and it represents about half the value of the Latin American market,” chief executive Paul Hermelin said on Thursday.

He added there were forecasts for double-digit growth for the country through 2014.

CPM Braxis has annual revenues of roughly 450 million euros and 5,500 employees. Its enterprise value was estimated at 437 million euros, according to Capgemini.

The deal gives the French group the option, on certain dates each year, to buy the rest of CPM Braxis whose existing shareholders have an option to sell their remaining shares.

Capgemini said it would begin to consolidate CPM Braxis in its accounts from October, and that the deal would begin to contribute to earnings some time in 2011.

Asked how Capgemini's acquisition strategy would change after this deal, Hermelin said that the company would still consider smaller deals to complement its activities globally, but that any further major deals were unlikely this year.