The new IT services company formed by the merger between Brazilian IT consultancy BBKO Consulting and compatriot IT services firm Hold TI will look to open offices abroad and begin acquiring other companies in 2009, BBKO directing partner Marcos Peano told BNamericas.
"Individually, both companies were not large enough to make high investments and think of acquisitions, but now with the merger, the two companies can pool their efforts," said Peano.
According to the executive, the new company - which has yet to be named - will target the Latin American market and look to establish a strong position in the region.
For 2009, Peano expects the company to open one office in Argentina and another further north, in Mexico or Colombia.
However, the intention is not to use the northern office to service US customers yet. According to the executive, it will be easier to enter the US market after consolidating its position within Latin America to then use the position as an added value offer to US clients that may be looking to enter into or expand in Latin America.
Further, Brazilian IT service prices are still too high to compete with India - another reason to first implement a regional strategy, he said.
Acquisitions are definitely in the company's plans for next year, even though Peano said he could not reveal further details for now. The main point of joining BBKO and Hold's operations was to offer a larger portfolio to clients which are constantly looking to consolidate service partners, getting more services from a select few.
"We represent about of 8% of the Brazilian market of SAP but to be able to grow in SAP we also need to be able to provide other services," said Peano. "Hold will enable us to add value with infrastructure, in consulting and services for networks and technology systems, mainframe and Java and dotnet development. We aim to double our SAP market share and this cannot be done in the short term through organic growth."
The merged companies will target new projects together and are shooting for total revenue of 250mn reais (US$138mn) by 2010. BBKO expects to close the current year with 40mn reais in revenues, while Hold TI expects revenues of 85mn reais.
The merging process is expected to be completed within two years, and until then management will remain separate. Together, the companies will have 750 employees.
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