Tata Consultancy Services, India’s largest IT services vendor, has announced the acquisition of Chilean business process outsourcing provider Comicrom for $23 million. The deal marks a further expansion of Tata’s horizons in the financial services sector, offering a potentially lucrative foothold for the firm in the Spanish speaking world.
India’s Tata Consultancy Services has bought Chilean BPO vendor Comicrom.
The acquisition of privately held Comicrom and its 1,257 employees will more than double TCS’s headcount in Latin America. The company made revenue of $35.5 million in its last full fiscal year, and generated an operating margin of 14%. It is the dominant player in the banking BPO sector in Chile with a 57% market share of the check-processing business, with over 70% of Chilean banks using its services. It also processes the majority of pension fund and health insurance premium payments in the country.
TCS first entered Latin America in 2002, when it formed a joint venture with Comicrom for IT services of which the domestic vendor owned 49%. TCS will gain complete ownership of the venture through the acquisition. Over the last three years, TCS has won several clients in the region including Grupo Santander, General Motors, ING, Goodyear and Brasil Telecom, and claims to be the only Indian IT company with a significant presence there.
TCS plans to set up a delivery center in San Paulo, Brazil, in order to support its application maintenance deal with ABN Amro, which was announced in September. It is also expanding its center in Uruguay by recruiting employees from Argentina.
The deal is further evidence of the Mumbai-based company’s ambitions in the BPO space, especially in the banking and insurance verticals in which Comicrom operates. Last month, TCS announced an $878 million joint venture with UK life assurance giant Pearl.
The Comicrom acquisition is however unlikely to be a part of a strategy to move work from the Pearl deal offshore, however, because TCS has stated that it will keep such work in the UK for the foreseeable future. Instead, the acquisition gives TCS a major presence in Latin America, and a low-cost workforce to help win clients requiring Spanish speakers.