Totvs (pronounced ‘tot-us’), Brazil’s (and indeed Latin America’s) largest ERP software firm – and arguably 6th largest worldwide – has boosted its presence in the domestic Retail, Wholesale & Distribution sector with the acquisition of veteran local player, PC Sistemas. Totvs will pay a maximum of R$95m cash (c. £30m), all bar R$15m up front. PC Sistemas, the market leader in this segment, turned over R$52m (c. £16m) in 2012, implying a historic PSR of 1.8x.
Thus Totvs shows once again it is closer to the Sage model (buy the best in the market and rebrand) than the ‘global ERP’ model (see BrazilViews). Absolutely nothing wrong with that so long as (a) you ‘stick to your knitting’, and (b) the market is fragmented (which it is in Brazil).
I’ll have more to say on Totvs when it reports FY results next week.