Resource IT Solutions aims to grow 35% in 2011, pursue new acquisitions in 2012

- Wednesday, November 23, 2011

Resource IT Solutions aims to grow 35% in 2011, pursue new acquisitions in 2012

Brazilian integrator Resource IT Solutions estimates it will end 2011 with 270mn reais (US$150mn) in revenues, up 35% - 10 percentage points of which can be attributed to acquisitions and 25 points to overall organic growth, Resource's president Gilmar Batistela told reporters during a press conference.

"Furthermore, we are ending the year with 2,800 employees, two new subsidiaries in Latin America, seven affiliates and 8,000 square feet of offices in São Paulo alone," the executive said.

Resource has seen strong growth in particular over the last three years, mostly due to acquisitions. And this trend is expected to continue in 2012, according to Batistela, boosting the company's revenues to an estimated 350mn reais.

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The company is eyeing up mostly medium-sized companies, but only those that can add very strategic value to Resource, according to Batistela. "We are not looking to just shop around."

He stressed that potential new purchases can be entirely funded by the company's own cash flow, though did not discard turning to banking financing, such as Brazil's national development bank BNDES, to fund part of the purchase of larger companies if needed.

The executive also highlighted that in the short term, continuing on the company's pattern of strong growth, Resource will launch an initial public offer of its shares.

Batistela estimates that, with new acquisitions and increased organic billings, the company should approach 1bn reais in revenues by 2015-16.

GEOGRAPHIC EXPANSION

Resource's latest purchase, consulting firm BBKO, strengthened the company's SAP offering and brought a portfolio of more than 100 multinational clients, helping Resource to expand operations in Brazil's southern region - a long sought-after market for the company, according to Batistela.

Now, the company is also opening an office in Salvador, Bahia, and eyeing the northeast region.

Regarding Latin America, besides the newly launched operations in Chile and Argentina, company executives are also targeting the Mexican and Colombian markets, although with no specific plans yet.

Batistela said Resource has 5mn reais in cash to invest in its Latin America project. "We have a very clear plan to expand in the region."

WORKFORCE

One possible obstacle in Resource's expansion path can be the scarcity of qualified IT employees in the country, an incresing reality as acknowledged by the company.

In order to face that, Resource is providing internal training and enhancing partnerships with universities and technical schools. "We cannot be hit by this shortage," said the company's new business VP Marcos Peano.

BUSINESS VERTICALS

Resource's main business verticals are the electronic payment segment and solutions for the financial sector, but new and as of yet unassessed business niches, such as the government, are being studied.

According to Peano, former BBKO Consulting president, demand for Salesforce.com solutions are expected to expand in the country. "We have already closed Salesforce cloud offering partnerships, with some active clients," he said.

Neverthless, the strongest demand in solutions shall continue to be for SAP, Peano added. "And our goal is to snatch market share from our competitors in this segment."