Totvs has wrapped up a deal to acquire a 100% stake in a local IT solutions provider Seventeen Tecnologia da Informação em Informática for about $18 million, further bolstering its already dominant position in Brazil’s enterprise software market.
Seventeen has about 130 employees and offices in several provincial towns, including Caxias do Sul, Joinville and Sorocaba. Most of its clients are the country’s large health insurance providers.
Analysts say Totvs’ success in Brazil is in large part due to its ability to tap into the growing demand for software in the kind of provincial towns where Seventeen operates.
The latest acquisition comes as little surprise because Totvs dominates Brazil’s $1.9-billion-a-year enterprise software market and its income has been rising in the past few years. As recently as last month, the world’s biggest fund manager, BlackRock, increased its stake in Totvs to 5%.
Totvs will pay $2.45 million upfront for Seventeen and will disburse the remaining $ 5.7 million over the next four years if the acquired company meets the operational target set in the contract.
“The new acquisition further bolsters Totvs’ presence in the healthcare segment,” stated the company’s Executive Vice President Alexandre Dinkelmann. According to an article in London’s The Economist, Totvs supplies roughly half of all business software and services on its home turf, either directly or through franchises.
Totvs already has several clients in the Brazilian healthcare sector, offering a wide variety of software to hospitals, physicians, laboratories and diagnostic centers.