Paris, Sao Paulo: Capgemini says that an investment by Caixa, one of Brazil's biggest banks, in its Brazilian subsidiary could be the springboard to accelerated growth in the region.
- Caixa selects CPM Braxis Capgemini as strategic IT partner
- Bank buys a 22% stake in the IT services company
Caixa Participacoes, Caixa Economica Federal's wholly owned investment arm, has signed agreements with CPM Braxis Capgemini, Capgemini's 61% owned Brazilian IT services company, to buy a 22% stake in that company through the simultaneous purchase of shares from existing shareholders and the subscription to a capital increase.
As part of the investment deal, CPM Braxis Capgemini will become a preferred IT supplier to Caixa Economica Federal (Caixa) for the next 10 years. The consummation of the transaction remains subject to the approval by the Brazilian antitrust authorities and the Central Bank of Brazil and is expected to close in the coming months.
Caixa is the fourth largest bank in Brazil by total assets and the largest public bank in Latin America. Founded in 1861 and based in Brasilia, Caixa, a government financial institution, provides banking products and services in Brazil. Caixa is also a key partner of the Government in social programs.
It plans to leverage CPM Braxis Capgemini's IT services to modernize its IT systems in order to provide more state of the art services to its customers.
As a result of its new preferred supplier relationship with Caixa and an existing client relationship with Banco Bradesco S.A., CPM Braxis Capgemini will become the leading IT services provider to the financial sector in Brazil.
The investment deal
Under the terms of the transaction, CaixaPar, Caixa's wholly owned investment arm, will acquire a 22% stake in CPM Braxis Capgemini through the purchase of shares from existing shareholders and the subscription to a capital increase.
CaixaPar will thus become the second largest shareholder in CPM Braxis Capgemini, with significant governance rights. Total investment from CaixaPar will amount to BRL 321 million (EUR 128.4 million) including BRL 121 million (EUR 48.4 million) of new shares through a capital increase.
The equity value of CPM Braxis post -transaction will amount to BRL 1.46 billion (EUR 584 million). Capgemini will maintain its controlling shareholder position in CPM Braxis Capgemini with a 55.8% stake after the transaction, and will continue to consolidate CPM Braxis Capgemini financials with its own.
Paul Hermelin, Capgemini's Chairman and CEO, said, "This agreement is a key milestone for our expansion plans in Brazil and Latin America. We are delighted to become Caixa's IT preferred partner, and look forward to accompany this major Latin America financial company in the modernization of their IT systems, building on our leading position in the financial sector."
Jose Luiz Rossi, CPM Braxis Capgemini's CEO, commented, "The entrance of Caixa Economica Federal in our group of shareholders will bring unprecedented conditions for accelerated and sustainable growth in the short and long terms. This strategic partnership will provide, in addition to volume and critical mass, development opportunities in the Brazilian IT services market".