IT nearshoring pioneer, Avantica Technologies, announced this week that it has been acquired by global outsourcing provider, Indecomm Digital Services, marking yet another significant acquisition among top-tier Nearshore software services companies in recent months.
In a conversation with Nearshore Americas, Avantica’s CEO and co-founder, Mario Chaves, revealed the deal was closed during the first week of this month and that the discussions for the purchase have been going on for around a year. “Indecomm has acquired 11 companies, and the previous owners remain there. The acquisitions are run as independent companies,” said Chaves, commenting that Avantica will have significant autonomy going forward. Retaining independence appears to have been a crucial requirement in order for the deal to go through.
Chaves remarked that the structure of the acquisition brings more liquidity to the table, increases the global pool of labor and technology resources and allows the company to operate in virtually the same manner it has since its founding – in 1993 – when Mario and his brother Luis Carlos established Avantica in San Pedro, Costa Rica.
The deal boosts Indecomm’s footprint in Latin America, gaining Avantica operations in Peru, Bolivia, Costa Rica, and Cali, Colombia, which Chaves disclosed will be the location of Avantica’s newest delivery center opening early next year. The software service company has about 1,000 employees at the moment, of which 400 are located in Costa Rica.
Chaves declined to disclose terms of the deal. Major clients and employees were notified in recent weeks, and Chaves notes that the reaction has been ‘very positive.’
Commonalities Between Two Digital Operators
Indecomm Digital is backed by the private equity firm Warburg Pincus, providing tech services like Predictive Analysis, Machine Learning, AI, IoT, Cloud, and Test Automation. The firm already had an operation in Mexico and a small team operating in Costa Rica. It also has multiple US offices, with headquarters in Scottsdale, Arizona. Indecomm Co-Founder and CEO, Venu Raghavan, said in a press release that the purchase would help consolidate Indecomm’s Latin America footprint.
“Avantica has an excellent track record in delivering partner-centric software engineering services with a Nearshore advantage to both established and early-stage software companies,” he said. “Together, we will be one of the leading product and digital innovation providers in Latin America, well-poised to deliver accelerated business outcomes to our customers.”
According to Chaves, the idea of selling Avantica first came up about ten years ago, when another global services organization inquired about a possible acquisition. The parties didn’t agree on a deal, but the possibility stuck in the mind of the brother co-founders.
One year ago, Mario Chaves was introduced to Indecomm leadership. After being briefed about the company’s strategy, the co-founders saw several commonalities: they both offered enterprise software, and they were compatible geographically, with Indecomm having a strong presence in the offshore Asian markets, and Avantica being well-positioned in Latin America.
Chaves stressed that the path forward for Avantica will look just like it did pre-acquisition, except the pace of growth will accelerate as the organization gains strength from the talents and tools now available through Indecomm.
Avantica has seen particularly strong growth in recent years, and partly as a result of that growth, the firm hired a new US-based Chief Technology Officer, Andrew Fawcett, who joined the company late last year.
The Avantica news comes only a few months after the disclosure that another top-tier Nearshore IT company, Belatrix, would become part of Globant. Both Avantica and Belatrix have achieved remarkable long-term success and have developed strong reputations for the quality of their services and products.