Scansource snaps up CDC Brasil

by Stuart Wilson, Thursday 14 April 2011

NASDAQ-quoted VAD Scansource is set to buy CDC Brasil

NASDAQ-quoted VAD Scansource is set to buy CDC Brasil. The purchase will be made through Scansource’s wholly-owned Brazilian subsidiary, Scansource do Brasil Participações. CDC Brasil is a leading in-country distributor of automatic identification and data capture (AIDC) and point-of-sale (POS) solutions.

Scansource will splash out US$35.4m cash up front for CDC Brasil with a four year earnout attached. The earn out will be paid in annual instalments and assuming earnings remain at current levels would take the total purchase price to US$63.6m.

CDC Brasil sells only through the reseller channel and offers many of the products that also feature in Scansource’s portfolio. The experienced Brazilian management team of CDC Brasil will remain in place, becoming management of Scansource do Brasil. This management team, which founded the company in 2003, has more than 55 years of industry experience. Current CDC Brasil president, Alexandre Conde, will be named president of Scansource Brasil and will report to Elias Botbol, president of Scansource Latin America.

“The Brazilian market represents a great opportunity for Scansource. Because of Brazil’s unique business climate and high growth potential in our industry, we felt it was important for ScanSource to have an in-country presence,” said Mike Baur, CEO at Scansource.

“CDC Brasil is a perfect fit for Scansource. They are extremely well respected by their customers and vendors, have a management culture similar to ours and are a very profitable company with great growth potential. We look forward to having Alexandre Conde and his team as part of the Scansource family,” he added.

In less than eight years, CDC Brasil has grown sales to approximately US$140m. CDC Brasil has more than 30 vendor partners, including Bematech, Honeywell, HP, Motorola and Zebra. The company employs approximately 200 people. Like Scansource, CDC Brasil aims to provide value-added services to its reseller partners, including technical support, financing, training and sales support.

“Brazil has been the missing piece in our Latin America strategy and to complete that puzzle with CDC Brasil is very exciting for us. In-country representation allows us to more easily scale, as well as manage complicated import processes, tax structures, and IT system requirements. With Brazil, we will now have full Latin America coverage,” said Botbol.

“We have known Alexandre and members of his team for many years. They are by far the most successful POS and barcoding distributor in Brazil, which is a testament to their management team and employees and their commitment to two-tier distribution,” Botbol continued.

Conde commented: “CDC Brasil has realized significant growth in the AIDC-POS market and, through this acquisition by Scansource, we see opportunity for increased investment on behalf of our customers and vendor partners, as well as continued growth and expansion. I have great respect for the Scansource team and I am looking forward to leading Scansource Brasil into a very bright future.”

DISTREE Latin America

DISTREE Events is expanding into the Latin American market in 2011, driven by demand from ICT and consumer electronics (CE) vendors for a regional channel development platform. DISTREE Latin America will offer easy access to major buyers from across this vast region in one place at one time. www.distree-latam.com

The inaugural DISTREE Latin America will take place at the Jequitimar Sofitel in Guaruja, Brazil, from September 13th to 15th 2011. Read more details here.

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