Grupo Assa tapping financing to expand in Brazil, Mexico

Tuesday, March 8, 2011

Latin American consultancy and systems integrator Grupo Assa will leverage funds gained from bond placements and capital injections to drive expansion in Brazil and Mexico this year, Grupo Assa director general Carlos Castilla told BNamericas.

Last year, Grupo Assa issued US$7.5mn in eurobonds, and also secured an additional US$20mn investment from the World Bank's private sector arm IFC and HSBC Latin America Partners.

"In both countries [Brazil and Mexico], investments will be made in the context of organic and inorganic growth," Castilla said.

Start your 15 day free trial now!


Already a subscriber? Please, login

The firm recently cut the ribbon on a Mexico delivery center, which will provide SAP (NYSE: SAP) and Oracle (Nasdaq: ORCL) services to clients in the local market, other Latin American countries and also in the US and Europe.

Castilla said the next step entails opening a local software factory by year's end. The facility, which will most likely be erected in the vicinity of Mexico City and employ 70-100 workers, will focus on areas such as client legacy system modernizations.

"In this process, we are looking for assistance from [software industry development program] Prosoft funds," the executive said without revealing the total investment estimations.

Grupo Assa expects overall revenues to increase 40% this year, and Castilla emphasized that the increase will be driven by a combination of organic and inorganic growth.

The consultancy is eyeing "a probable tactical acquisition and also a strategic acquisition," he said. "In that context, we are doing research and due diligence in Brazil and Mexico to see how we can grow."


Other priorities this year include beefing up the company's business process management (BPM) offering, as well as its software implementation business among healthcare providers, the executive said.

Such priorities might put Grupo Assa on a crash course with Latin American IT consultancy firm Neoris, whose CEO, Claudio Muruzabal, recently told BNamericas that BPM and healthcare also figured among its top bets for 2011.

Castilla - who joined Grupo Assa from Neoris late last year - downplayed the overlap, noting that direct competition between both firms has so far been minimal.

"In Monterrey, we are competing on a few projects," he said. "We have had more competition with Deloitte, IBM and in some cases with Accenture."

Grupo Assa's long-term expansion strategy entails growing to 2,500 employees by 2014, when total revenues will reach US$150mn, according to previous BNamericas reports. The company posted an 18% increase in sales last year, Castilla said.

Within Latin America, the company currently has 1,200 consultants and operations in Mexico, Argentina, Brazil and Chile. The company provides services to roughly 200 companies with 40,000 end users.