Evertec announces merger with Sinqia
Move positions San Juan-based company as the financial technology leader in Latin America
By The Star Staff
Focused on continued expansion and significant growth in Latin America, leading end-to-end transaction processing company Evertec (NYSE: EVTC) announced this week the closing of the purchase transaction with Sinqia, a leading provider of technology solutions for financial institutions in Brazil, after signing a definitive acquisition agreement in July.
Evertec CEO Mac Schuessler said “with this integration we will be a more diversified, faster growing, and stronger company bringing Evertec’s experience in payment solutions to Sinqia’s approximately 1,000 customers in Brazil, complementing its current software offerings, and cross-selling Sinqia’s products to our customer base of existing financial institutions in other countries in Latin America.”
Sinqia’s consistent double-digit organic growth, coupled with its successful acquisition strategy, has resulted in an overall revenue growth rate of 52% over the past four years with approximately 85% recurring revenue from a very diverse customer base. Those characteristics align perfectly with Evertec’s strategic goals of diversifying into key markets with high growth potential, with proprietary software and where there is an opportunity to add value.
“The combination of a solid financial position, predictable cash flow and knowledge of the region is a solid platform to significantly expand our presence in an attractive market like Brazil,” Schuessler pointed out. “Combining our digital payments platform with Sinqia’s banking and financial software platform will position us as the leading financial technology company in Latin America.”
Mergers and acquisitions (M&A) has been an important strategic focus, enabling Evertec to expand into new geographies and broaden its product offerings, and the acquisition of Sinqia represents another step in this transformation. The Brazilian company has a consistent history of growth, both organically and through a successful M&A strategy, with great potential for important revenue synergies when combined with Evertec.
Evertec’s goal with the acquisition is to democratize financial services technology in Latin America and the Caribbean, which requires exploring opportunities in the entire ecosystem, gaining relevance in different markets throughout the region and operating as a multinational financial technology company.
“The acquisition of Sinqia helps us achieve this objective,” the Evertec CEO noted. “Given its growth strategy and attractive financial profile, complimentary product portfolio and its strong presence in Brazil, it is the ideal partner to continue strengthening our footprint in the region.”
How does the move impact customers? Schuessler said it will now be possible to reflect on new capabilities and evaluate opportunities to continue servicing Evertec’s existing customers.
“Sinqia is a leader in its segment, providing software solutions for financial institutions in Brazil with its six business units: Banks, Funds, Pensions, Consortium, Digital and Services,” he said. “These assets are highly complementary to Evertec’s payments product offering, with minimal direct overlap. Together, they represent a complete and comprehensive value proposition for customers.”
Evertec’s partners will have the possibility of offering service
s to some 1,000 customers in Brazil, who potentially need the same types of services. For external stakeholders, the transaction will translate into long-term value for the company.
With regard to employee impact, the integration between the companies started at the end of September, and significant changes are not expected in the near future as Evertec’s focus is to become familiar with Sinqia and understand its processes and products, to foster the “best of both” in both culture and among employees.
In this context, day-to-day operations are not expected to be impacted and no significant immediate changes will be made to the organizational structure. Schuessler added that he expects the transaction to provide the joint company with additional skills and capabilities globally.
“This is a highly complementary transaction, and our hope is together to provide increased opportunities for our joint teams,” he said.
Schuessler also pointed out that his focus is on long-term growth, investing in each company’s technical capabilities and market know-how.
“We will communicate regularly and provide updates to ensure everyone is well informed about any developments that may arise,” the Evertec CEO said. “The goal is to minimize disruption while creating a stronger, and more successful company.”