Kirk LaughlinUS IT services provider CSC (NYSE: CSC) is actively considering carrying out an acquisition to expand its Latin American presence, CSC’s chief innovation officer, Lem Lasher, told BNamericas. CSC is looking to acquire a company that can enhance CSC’s Latin American footprint in consulting, systems integration and outsourcing.
“We like the bigger plays; we’re not going to buy smaller companies, per se,” he said, “although we may look at niche players.” Lasher said CSC has directed its sights across various Latin American markets, though Mexico has generated the most interest.
“The markets we’re most interested in are Brazil, Chile, Mexico and Argentina,” he said. “We’re already active in those markets. But the kind of scale that we have in Brazil now is what we would like to have elsewhere.”
Lasher could not provide further details on CSC’s acquisition negotiations.
BRAZIL DEVELOPMENTS
US consultancy firm BearingPoint announced in March last year it was in negotiations with its Latin America management teams to sell its operations in the region. CSC subsequently completed the acquisition of the company’s Brazilian operations in August.
At the time of the acquisition, CSC and BearingPoint Brazil collectively had 75-100 accounts in the Brazilian market.
Lasher said CSC Brazil has since won contracts in the “key” vertical markets of telecommunications, utilities and natural resources. The company has focused on implementations of SAP (NYSE: SAP) ERPs, with the bulk of the work coming in São Paulo and Rio de Janeiro.
The banking sector represents another growth area in the Brazilian market, according to the executive, who noted that CSC also has small operations in capital Brasília.
“We’re quite bullish about what’s going on in Brazil,” he said. “We think the political climate there is stable, in spite of the fact that elections are coming up this year. We think the economy is stable and good.”
COMPETITION
Within Latin America, CSC will be looking this year to capture large outsourcing and infrastructure and application management business. Other areas of focus include ERP implementations and technology consulting, as well as industry-specific solutions.
The company also plans to roll out new solutions into the Latin American market, namely SOA, BPM and cloud computing services.
CSC is going head-to-head with a mixture of large multinationals and more regional players. Within SAP implementations, CSC tends to compete more with IBM (NYSE: IBM) and US consulting and technology services company Accenture (NYSE: ACN), while Spanish systems integrator Indra tends to focus more on defense-related projects, Lasher said.
Chilean systems integrator Sonda represents another top competitor, especially in the government and financial services sectors.
CSC’s Latin American presence includes operations in Argentina, Brazil, Chile, Colombia, Costa Rica, Guatemala, Peru and Mexico. The company is serving roughly 60 clients in the region.
“Growing the number of clients is not a high priority,” he said. “Growing the business with our existing clients is probably more important, and then winning incremental clients is secondary.”
Globally, CSC has more than 92,000 employees and raked in US$16bn in sales last year.
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