Russia Softline Acquires Compusoftware, Pushes Deeper into Brazilian IT Market

Softline, one of the prominent IT services firms in Russia, has snapped up Brazil’s software reseller Compusoftware, making the most of the decline in Brazilian currency that has made local firms far cheaper than they were years ago.
Softline has not disclosed how much money it paid for Compusoftware, but some analysts, whose opinions are published by Russian papers, estimated that Softline might have shelled out between $25 million and $35 million. Softline will pay 60% of the amount in cash and the remaining in shares, which it will float over the next five years. For Softline, this is the company’s first acquisition outside Russia.
Founded in 1996, Compusoftware was acquired in 2011 by Brazilian data services group Globalweb for $3.6 million. Compusoftware, headquartered in Sao Paulo, offers cloud, IT, and software-reselling services in major cities across Brazil. A report on Russian publication CNews says that Compusoftware employs about 180 people and serves more than 400 clients in Latin America.
“Compusoftware is a medium-sized firm, but Softline can certainly ride on its back to penetrate the region’s IT services market,” said Anderson Baldin Figueiredo, one of the leading IT consultants in Brazil. “To become successful, Softline should never try to push its ready-made software, instead it should create the software in accordance with need of its clients.”
Compusoftware focus on ready-made software, rather than developing custom software, was one of the reasons that Globalweb sold the subsidiary. Globalweb will now focus on outsourcing and systems integration.
There is a huge demand for cloud service in Brazil, but analysts say Softline might have to build out its cloud infrastructure to compete better with the likes of Accenture. Unlike Indian outsourcing firm Infosys, Softline is not sitting on a mountain of cash to build IT infrastructure. Even the money it used to purchase Compusoftware was borrowed from Sovcombank, one of the mid-sized banks in Russia.
“Still, I believe Softline will become successful in Brazil but it has to pay heed to local executives and learn the need of its clients,” Figueiredo said.
Softline entered Latin America with the launch of an office in Venezuela in 2008. The company has since launched offices in several Latin American countries, including Colombia, Peru, Argentina, Costa Rica, and Chile. Although it looks like just a reseller of Microsoft products, Softline has a full spectrum of IT services on offer, including consulting, technical support, virtualization, cloud, and SaaS.
In Brazil, Softline is barely a year old. But the Russian firm is devising plans to expand operations to Mexico and hopes to see its Latin American revenue exceed $200 million by the end of 2017.
Together, Softline and Compusoftware have 600 clients and annual revenue of $146 million, with Compusoftware representing about $50 million of that total. Research firm Gartner estimates that the Brazilian market for corporate software will reach $4.1 billion by 2019.