Spanish IT firms merge to create $360m Firm
Date: 11-09-2007
Source: Datamonitor
Spanish IT services player IT Deusto has merged with local rival Grupo Gesfor to create a company with combined annual revenue of approximately 260m euros ($360m).
The enlarged group, which has yet to be named, will have about 5,000 employees and is planning to hire another 1,000 staff in 2008. It will rank as one of the largest indigenous vendors in the Spanish IT services market, although it will remain some distance behind market leader Indra Sistemas, which reported domestic sales of 944.5m euros ($1.3bn) in 2006.
IT Deusto reported revenue of 115.1m euros ($158.7m) in 2006, some 97% of which was generated in Spain, and is mainly focused on providing IT outsourcing and consulting services. The company has made a couple of acquisitions already this year, snapping up privately owned Spanish players Tecnobit and Sermatica.
The deal with Gesfor will boost IT Deusto's presence outside Spain. While IT Deusto's international operation consists of offices in Portugal, Colombia, and Brazil, Gesfor has facilities in Argentina, Brazil, Chile, Colombia, Mexico, Peru, the US, and Venezuela.
Our View
The last 18 months have seen a significant amount of consolidation in the Spanish IT services sector. Market leader Indra led the way, acquiring Soluziona and Azertia in July 2006, while more recent moves have seen Tecnocom buy the Iberian business of Getronics, French player Bull pick up Siconet, and HP move for Netfocus, the IT services division of Banco Sabadell.
The merger of IT Deusto and Gesfor is a continuation of this trend. The combined entity will join the ranks of mid-sized Spanish IT services vendors alongside Tecnocom, Telefonica, and Ibermatica. Also present in the market are a number of international players including IBM Global Services, Accenture, T-Systems, Atos Origin, and Capgemini.
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