Grupo BC, a bank services outsourcing company, is searching for acquisition targets, said Diego San Jose, head of its digital services division, and IT Director Domingo Almaraz, in a joint interview.
The Madrid-based company has three main criteria for deals, the executives said. One is to extend its value chain, they said. The company’s main area of expertise is back-office services for mortgage formalization.
A second criteria for deals is to increase its range of clients while unlocking synergies, San Jose and Almaraz said. The company’s clients include banks and property funds.
The third criteria is to improve the company’s technological capacity for digital services, the executives said. The company is particularly interested in deep and machine learning, big data, intelligent optical character recognition (OCR), robotic process automation (RPA) and microservices, they said, adding that it is currently closing a tech deal.
It can take up to two months for end users to get approval on a new mortgage, the executives said, adding that Grupo BC’s aim is to reduce this to two weeks, using new digital technology. The company is expecting revenues of EUR 150m this year, compared to EUR 120m last year. Targets could range in size from 5% of revenues up to 40%, the executives said, adding that interesting technology would tend to be on the smaller side.
Grupo BC, which has been acquisitive in the past, has a range of financing options, including seeking equity from its main shareholder, L-Gam, bank lending and cash, the executives said. L-Gam owns 70% while management owns 30%. The company has a high level of recurring income and low debt, the executives said.
The company, which is present in Brazil, Chile, Colombia, Mexico, Peru, Portugal and Spain, is also studying its entry into Argentina, Italy and US within the next two years, San Jose and Almaraz said. An acquisition would make sense in the US as an entry point, they said, adding that this is less true of Argentina.
Grupo BC practices advisory rotation, depending on the nature of the deals it is working on, the executives said. Advisers who have identified interesting targets should get in touch, the executives said.
The company is also planning an IPO within a couple of years, the executives said. However, it is not yet ready for the move, they added. It competes with Indra Sistemas [BME:IDR], Accenture [NYSE:ACN] and Everis. Grupo BC has more than 3,200 employees and a history of more than 40 years.
by Rupert Cocke in Madrid / Merger Market
Date: 28/04/2019
