In our half yearly webinar, I touched on a few trends becoming evident in Latin America. The first half of 2012 is at an inflection point for deal activity in Latin America. Last year private equity was pouring huge sums of money across all industries in countries like Brazil, Argentina and Chile. This year weve seen some sizeable M&A transactions by strategic acquirers. Sage Group, out of the United Kingdom, reached out for Folhamatic Group, a SaaS accounting software provider, for $260m EV, 3.6x Revenue. And other multi-national companies like Schneider Electric, Thompson Reuters and NCR all have done deals there in the last 6 months.
The following is an example of a great company built in Latin America that is doing acquisitions of their own from the buy-side. Cielo, a large public Brazilian credit card processor, acquired Merchant e-Solutions based out of California. They paid $670m for the transaction processing service; more than half their revenue is attributed to e-commerce transactions. Merchant e-Solutions has been praised for their complete solution as well as a strong mobile processing service. Both of Cielos US-based competitors, Visa and Mastercard, have done their own deals with the mobile/online angle as well to keep pace in the next round of innovation.