US IT products distributor ScanSource (Nasdaq: SCSC) has signed a definitive agreement to acquire Brazilian automation product distributor CDC Brasil for some 103mn reais (USS$63.6mn), according to a press release from ScanSource.
At the close of the deal, ScanSource's wholly owned subsidiary ScanSource do Brasil will control 100% of the shares in CDC Brasil.
According to ScanSource, CDC Brasil's management team will remain intact and continue on at ScanSource do Brasil. Current CDC head Alexandre Conde will become the new president of operations.
ScanSource recognized the importance of having a presence in Brazil due to the country's business climate and growth potential in the industry, the company's CEO, Mike Baur, said.
ScanSource Latin America president Elias Botbol said a country representative in Brazil will allow the company to scale more easily and manage complicated import processes, tax structures and IT system requirements.
In the all-cash transaction agreement, ScanSource pay an initial price of 57.3mn reais, and the remaining purchase will be paid in annual cash installments based on CDC Brasil's financial performance through June 30, 2015.
ScanSource will also assume working capital debt at the close of the deal. As of March 31, 2011, CDC's debt was 1.9mn reais.