Logica's purchase of Spanish integrator Gesfor seen as targeting Latin America

Monday, May 30, 2011

The goal behind UK IT services firm Logica's (LSE: LOG; Euronext: LOG) acquisition of Spanish systems integrator Gesfor is to expand business in a new geographic area, particularly in the Iberian cluster as well as some Latin American countries, Pierre Audoin Consultants (PAC) said in a statement.

Gesfor has activities in Latin America, representing about 30% of its revenues, with presence in Chile, Mexico, Argentina, Colombia, Panama, Venezuela and Peru.

The recent acquisition could be part of the growth opportunities that Latin America offers, said Daniel Esteves, a consultant at PAC specialized on the Spanish market.

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"For the last five years, Spanish IT companies have improved their capabilities in Latin America, and the major trend in Spain is to develop new growth drivers in order to capitalize on their business knowledge, to assist local players in their growth strategies and to provide cultural synergies," Esteves said.

Until recently, Logica was absent from the Spanish market, except for contracts in utilities sectors.

The Portuguese market's limited growth, as well as Spain's economic crisis, presented an opportune environment for Logica to make its move, the consultant said.

Gesfor is ranked 27th among the IT services providers in Spain, behind Indra or IECISA. Its principal customers are in the financial and public sectors.