LATIN AMERICAN TECH M&A Q OCTOBER 2013

Transcripción

1 LATIN AMERICAN TECH M&A Q OCTOBER 2013

2 Jason Steblay Analyst, Corum Group Jason joined the Corum Group s Seattle office as a Research Analyst in He works with clients to develop strategic marketing documents that deliver compelling value propositions to prospective buyers. Prior to joining Corum, Jason was a Business Analyst at the U.S. Chamber of Commerce where he produced thorough business cases on strategic initiatives. He also provided research memorandums on a wide range of business, economic, and political issues. Before that, he worked for a firm specializing in trade compliance and facilitation in Washington DC. Jason earned his B.A. in International Affairs from the George Washington University in 2008, spending a total of 8 months in Latin America, including as an intern the economic-political section of the US Embassy in La Paz, Bolivia, and as a student in Mexico D.F.

3 World Financial Symposiums (WFS) is an international organization dedicated to educating technology leaders through monthly, 90-minute Market Spotlight webcasts and quarterly, one-day Growth and Exit Strategies for Software and IT Companies conferences. Upcoming Events: - Growth and Exit Strategies for Software and IT Companies, Silicon Valley - November 7, 2013 For more information visit

4 Agenda Welcome Jason Steblay - Analyst, Corum Group M&A in Latin America Jeff Brown Vice President, Corum Group Spanish Language Resources Alden Mendoza Data Analyst, Corum Group Mexican Structural Reforms - An M&A perspective Guillermo Garay, Partner, KSA Sandra Solis Lemus, Associate, KSA Q&A

5 Jeff Brown Vice President, Corum Group Jeff has over 25 years as an technology executive, entrepreneur and M&A advisor. Jeff joined Corum after a successful career as a technology executive with both private and public companies where he helped overcome the challenges of start-up, capitalization, turn around, high growth, global expansion and M&A. He's led business expansions and M&A across greater Latin America - including Mexico, South America and the Spanish speaking Caribbean. His start-up experience includes venture, consortium and bootstrapped companies. He is active in the entrepreneurial community and sits on advisory boards in the for-profit and non-profit sectors.

6 Latin American Technology Background Financial markets steady Projected >4% growth in Chile, Colombia, and Peru Argentina s Globant files for IPO on the NYSE Investors include Riverwood Capital, FTV Capital, WPP, and Endeavor Global. First Argentine tech firm on the NYSE. 82% of revenue from American clients

7 Largest Deals sold to Target: Satmex (Mexico) Buyer: EuTelSat (France) Transaction Value: $831,000,000 Date: Q Paris-based Eutelsat Communications is expanding into the Latin American market through the acquisition of fellow satellite communications provider Satelites Mexicanos (SatMex). - EuTelSat will now control Satmex s 11% share in Latin America. - Indicates future opportunity in the video services, data services, and broadband access marketplace.

8 Largest Deals merged with Portugal Telecom (Portugal) Oi Communications (Brazil) - Merger will create the largest telecommunications company in the Portugese-speaking world. - Combined revenue in 2012 was $17 billion, with 100 million subscribers.

9 Largest Deals Target: KPN (Netherlands) Buyer: America Movil (Mexico) - Offer announced at $9.5B to acquire rest of KPN assets. Target: Telecom Italia (Italy) Buyer: Telefonica (Spain) - Telefonica looks to increase its stake in Telecom Italia from 46 to 66 percent. - Brazilian antitrust laws may hinder acquisition process for Telefonica.

10 Horizontal Applications sold to Target: Control Document (Peru) Buyer: GRM (United States) Date: Q GRM is a full cycle records and information management company with 13 offices in the U.S. and 10 in China - Acquisition positions GRM to continue expansion into the Latin American market.

11 Vertical Applications DB Trans S.A. sold to Target VB Servicos and DB Trans S.A. (Brazil) Buyer: Fleetcor (United States) - Fleetcor will acquire Brazilian fuel card providers VB Servicos and DB Trans S.A. for a combined $300 million.

12 Vertical Applications sold to Target: Servicios Informaticos Serinfo, S.A. (Chile) Buyer: Solera (United States) Transaction Value: Not Disclosed Date: Q Serinfo s SaaS solutions help to expand Solera s presence in Latin America, including an introduction into the Peruvian market. - Solera will now have an expanded vehicle ownership platform across the entire automobile cycle, ranging from sale to maintenance.

13 Internet sold to Target: Megamenu, Janamesa, Web Serviços Digitais (Brazil) Buyer: Groupon Inc. (US) Date: Q The three acquisitions will help to further HelloFood s global expansion efforts into Brazil.

14 Internet sold to Target LogoChef (Brazil) Buyer: 99Designs (United States) - The acquisition of LogoChef will help expand 99Designs into Brazil as a follow-up to to their own localized site launches. sold to Target Eventioz (Argentina) Buyer: Eventbrite (United States) - Eventbrite s first acquisition allows it to tap into the Latin American events market through utilization of Eventioz s cross-border platform.

15 IT Services Target: Bosz Digital SA (Costa Rica) Buyer: Publicis Groupe (France) sold to - This acquisition is part of Publicis Groupe`s strategy to develop as a fully integrated cross-media production platform spanning Europe and North America, including three centralized platforms. Target Espalhe (Brazil) Buyer: Publicis Groupe (France) sold to - Publicis Groupe will expand it s global network into Brazil and Latin America through the acquisition of marketing house Espalhe. Target Brandigital (Argentina) Buyer: WPP (United Kingdom) sold to - This acquisition fits well into WPP s strategy of acquiring fast growing technology firms, as well as expansion into the Latin American marketplace.

16 Jeff Brown Vice President, Corum Group Jeff has over 25 years as an technology executive, entrepreneur and M&A advisor. Jeff joined Corum after a successful career as a technology executive with both private and public companies where he helped overcome the challenges of start-up, capitalization, turn around, high growth, global expansion and M&A. He's led business expansions and M&A across greater Latin America - including Mexico, South America and the Spanish speaking Caribbean. His start-up experience includes venture, consortium and bootstrapped companies. He is active in the entrepreneurial community and sits on advisory boards in the for-profit and non-profit sectors.

17 Alden Mendoza Data Analyst, Corum Group Spanish Language Resources Podcasts White Papers Conferences and Events Alden Mendoza joins the Corum Research Department staff as a Data Analyst, with specialization in translation and interpretation. He possesses multilingual talents (including English, Spanish, French, and German) which help to provide targeted global analysis. He has almost a decade of experience working as a global translator, with companies such as the Mesa Redonda press agency and the City Historian of Havana. Previously, Alden worked as a French teacher at the Foreign Language School of Havana University, where he earned his degree in French and German languages.

18 Mexican Structural Reforms A M&A perspective. Legal impact of legal reforms in Mergers and Acquisitions Reformas Estructurales en México Impacto legal de las reformas en Fusiones y Adquisiciones KSA K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR October 2, 2013 ABOGADOS Prol. Paseo de la Reforma 1015, Torre B, Piso 8 Col. Desarrollo Santa Fe México, D.F. Edificio VAO Av. David Alfaro Siqueiros No. 104, Piso 2 Col. Valle Oriente San Pedro Garza García , N.L. T. +52 (55) F. +52 (55) T. +52 (81)

19 KSA Partner Guillermo Garay has experience in infrastructure, mergers and acquisitions, bid contests, privatizations and financing, as well as in real estate and securitizations. Guillermo is a law graduate from the Escuela Libre de Derecho, with a postgraduate in Tax Law from the Instituto Tecnologico Autonomo de Mexico and a master s degree from the Universidad Complutense de Madrid. He has been a partner of Kuri Breña, Sanchez Ugarte and Aznar, S.C. since August of He has been involved in the negotiation and documentation of mergers, acquisitions, sales and partnerships related to Mexican companies, and has represented foreign financial institutions and advised them with regard to their operations in Mexico. He has been involved in the bidding and financing processes for electric power infrastructure projects, and in the issuance of commercial paper and exchange-traded certificates; as well as in the implementation of real estate development and industrial park projects. He has experience in various financing and financial restructuring transactions for Mexican industrial and commercial groups, also representing Mexican and foreign financial institutions. He has served as an advisor for banks and other companies in the purchasing of loan portfolios. Associate Sandra Solis Lemus joined Kuri Breña, Sánchez Ugarte y Aznar in She focuses her practice in real estate, corporate law, government contracts, antitrust and regulatory compliance, particularly anti-money laundering regulations. She is a law graduate from the Centro de Investigación y Docencia Económicas (CIDE), with a postgraduate in Commercial Arbitration from the Tecnológico de Monterrey and an LLM in Law and Economics from the Erasmus University Rotterdam and Hamburg University. In the summer of 2010 she worked at Carroll, Burdick & McDonough LLP in the offices of Böblingen, Germany in the area of Products Liability. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 19

20 Structural Reforms / Reformas Estructurales Important and substantial changes to key areas KSA Cambios importantes y substanciales en áreas clave Tax Antitrust Telecoms Energy Fiscal Competencia Económica Telecomunicaciones Energía Others: Financial, Labor and Education Otras: Financiera, Laboral y Educación K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 20

21 Tax Reform (approval pending) / Reforma Fiscal (pendiente de aprobación) KSA Income Tax Impuesto sobre la Renta New Income Tax Law which, if approved, will be effective as of January 1, Eliminates (i) Tax Consolidation Regime and is replaced by a Groups Companies Regime whereby the income tax can be differed for three fiscal years, and (ii) other special regimes, such as for carriers. Payment of 10% Income Tax to Mexican companies when distributing dividends or profits to residents abroad. Nueva Ley del Impuesto sobre la Renta, la cual si es aprobada, entrará en vigor el 1 de Enero de Elimina (i) el regimen de Consolidación Fiscal y lo reemplaza con un regimen de Grupo de Sociedades en el que el ISR se puede diferir por tres ejercicios fiscales, y (ii) otros regímenes especiales, como el de transportistas. Grava con una tasa del 10% a las compañías Mexicanas que distribuyan dividendos o utilidades a los residentes en el extranjero. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 21

22 Tax Reform (approval pending) / Reforma Fiscal (pendiente de aprobación) KSA Income Tax Impuesto sobre la Renta Eliminates the exemption on capital gains derived from the sale of shares in the Stock Market. Eliminates immediate tax deduction for investments. Payments made to related parties resident in Mexico or abroad shall not be deducted when they are exempt or are subject to a tax less to 75% of that tax that should be payable in Mexico, as well as when such payments be deducted by a related party resident in Mexico or abroad. Elimina la exención de ganancias derivadas de la enajenación de acciones en la Bolsa Mexicana de Valores. Elimina las deducciones inmediatas para inversiones. Pagos efectuados a partes relacionadas residentes en México o en el extranjero no se deducirán si están exentos o si están gravados con un impuesto inferior al 75% del impuesto que hubieran tenido que pagar en México, así como cuando dichos pagos sean deducibles por una parte relacionada residente en México o el extranjero. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 22

23 Tax Reform (approval pending) / Reforma Fiscal (pendiente de aprobación) KSA VAT VAT to temporal imports of the Manufacturing, In-Bond and Export Services. IVA IVA a importaciones temporales de Manufactura, Maquiladora y de Servicios de Exportación. 16% VAT homologation in all territory. IVA del 16% homologado en todo el territorio. 10% VAT on Stock Market profits. OTHER FISCAL PROVISIONS Eliminates Cash Deposit Tax (IDE) and Single Rate Business Tax (IETU). IVA del 10% en ganancias en la Bolsa Mexicana de Valores. OTRAS DISPOSICIONES Elimina el Impuesto a los Depósitos en Efectivo (IDE) y el Impuesto Especial de Tasa Única (IETU). K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 23

24 Impact on Medium and Small Businesses / Impacto en Pequeñas y Medianas Empresas KSA Advantages Disadvantages Ventajas Desventajas Easier to set up new entities No more special regimes for small taxpayers Facilidad para constituir nuevas empresas Eliminación de regímenes especiales (pequeños contribuyentes) Subsidy on employer s payments for social security Higher costs on imports for manufacturing industry Subsidio en el pago de cuotas patronales Más costos para importaciones de manufactura Incentives for MSB in secondary law Incentivos a PyMES en legislación secundaria K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 24

25 Antitrust /Competencia Económica KSA Changes at a Constitutional level. The secondary laws that will be introduced or amended to implement the Constitutional bill are pending. Competition Commission has the authority to: Regulate Essential Facilities. Apply Structural Remedies, such as sale of assets or shares in the proportion necessary to eliminate antitrust effects. New competition regulator. Decissions of the Commission not subject to suspension. Specialized courts to oversee competition cases. Cambios a nivel constitucional. Las leyes secundarias que regularán los cambios constitucionales están pendientes. La CFCE tiene facultades para: Regular los Insumos Esenciales. Aplicar remedios estructurales como la desincorporación de activos para eliminar efectos anticompetitivos. Nueva comisión de competencia. Decisiones de la CFCE no sujetas a suspensión. Tribunales especializados en temas de competencia. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 25

26 Impact on Medum and Small Businesses / Impacto en Pequeñas y Medianas Empresas KSA Advantages Disadvantages Ventajas Desventajas Punishes denial to deal Limited defense options against decisions of Antitrust regulator Castiga la denegación de trato Medios de defensa ante decisiones de la CFCE limitados Posibility to divest monopolies More authority to the Antitrust regulator Opens concentrated markets Posibilidad de desincorporar monopolios Más facultades a la CFCE Abre mercados previamente concentrados K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 26

27 Telecoms/ Telecomunicaciones KSA Changes at a Constitutional level. Cambios a nivel constitucional. Open competition in Mexico s telecoms markets; especially in the telecommunications and radio broadcasting. Remove the 49% threshold for direct foreign investment to up to 100% participation in telecommunications and satellite communications, opening the door for competition from foreign carriers. Special courts to oversee telecoms cases. Competencia abierta en el mercado mexicano; especialmente en difusión de radio y telecomunicaciones. Remueve el límite de 49% para inversión extranjera directa hasta un 100% de participación en telecomunicaciones y comunicaciones vía satélite, abriendo la puerta a competencia a operadores extranjeros. Tribunales especializados para telecomunicaciones. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 27

28 Telecoms / KSA Telecomunicaciones Up to 49% of foreign investment participation in radio broadcasting. Create spectrum for at least two additional private national television broadcasters through public bids. New telecom regulator. Specialized courts to oversee telecomuincation cases. Se abre la participación extranjera en radiodifusión hasta un 49% Se crea un espectro de cuando menos dos canales de televisión adicionales a través de licitación pública. Nuevo regulador IFETEL Tribunales especializadas en temas de telecomunicaciones. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 28

29 Impact on Small Businesses / Impacto en Pequeñas y Medianas Empresas KSA Advantages Disadvantages Ventajas Desventajas Opens market to private entities Abre el mercado a privados Opens market to foreing entities Abre la competencia a empresas extranjeras K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 29

30 Energy (approval pending) / Energía (aprobación pendiente) KSA Changes at a Constitutional level (Bill was submitted on August 12, 2013). The secondary laws that will be introduced or amended to implement the constitutional bill are pending. Allow private investors to participate in some of the activities related to oil exploration, basic petrochemical activities and generation and distribution of electricity. Cambios a nivel constitucional (la Reforma se presentó el 12 de agosto de 2013) Las leyes secundarias que se promulgarán o modificarán para regular el cambio constitucional están pendientes. Permite a inversionistas privados participar en actividades relacionadas con la exploración de petróleo, actividades petroquímicas y generación y distribución de energía. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 30

31 Reform in oil industry /Reformas en la industria petrolera No concessions related to oil, gas and hydrocarbons generally shall be granted. KSA No se otorgan concesiones relacionadas con petróleo, gas o hidrocarburos. Government can enter into agreements with other government or private entities for the exploration and production of oil and gas. The entities will be entitled, in connection with the resources obtained, to payments consisting of monetary compensation or an equivalent to a percentage of such resources. Issuance of permits to private entities to participate in oil and gas refining, transportation, storage and distribution activities. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR El Gobierno puede celebrar contratos con otros gobiernos o entidades privadas para la exploración y producción de petróleo y gas. Las entidades tendrán derecho, en relación con los recursos obtenidos, a pagos ya sea mediante compensación monetaria o un equivalente al porcentaje de dichos recursos. Emisión de permisos a entidades privadas para participar en actividades de refinería, transportación, almacenamiento y distribución de petróleo y gas. 31

32 Reform in Energy Power /Reforma en Energía Eléctrica KSA The Federal Government should retain control of the national transmission grid. El Gobierno Federal va a mantener control sobre la red nacional de transmisión. The Federal Government shall remain in charge of the public service of transmission and distribution of electric power. However, the Bill allows these services be provided to the Federal Government by private entities. El Gobierno Federal deberá controlar el servicio público de transmisión y distribución de energía eléctrica. Sin embargo, la ley permite que una entidad privada pueda proveer dichos servicios al Gobierno Federal. Private entities shall be able to undertake projects for the generation of electric power and compete with the Federal Electricity Commission for end users, such as big industrial consumers. Las entidades privadas deberán ser capaces de llevar a cabo los proyectos de generación de energía eléctrica y competir con la CFE para los usuarios finales, tales como grandes consumidores industriales. The energy Bill states to allow secondary laws to establish specific obligations in connection with the generation of renewable energy. El proyecto de ley de energía permite a la legislación secundaria el establecer obligaciones especificas en relación con la generación de energía renovable. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 32

33 Impact on medium and small businesses / Impacto en PyMES KSA Advantages Disadvantages Ventajas Desventajas Opens market to private entities Possibility to compete against Federal Electricity Commission The Bill can still be modified by Congress Mercado abierto a empresas privadas Posiblidad de competir contra CFE Reforma puede ser modificada por el Congreso. K U R I B R E Ñ A SÁNCHEZ UGARTE Y AZNAR 33

34 World Financial Symposiums (WFS) is an international organization dedicated to educating technology leaders through monthly, 90-minute Market Spotlight webcasts and quarterly, one-day Growth and Exit Strategies for Software and IT Companies conferences. Upcoming Events: - Growth and Exit Strategies for Software and IT Companies, Silicon Valley - November 7, Growth and Exit Strategies for Software and IT Companies, Seattle - January 29, 2014 For more information visit

35 Contact Us For further information or copies of today s presentation: Visit -or- jeffb@corumgroup.com