Ideiasnet sells Ciashop to TOTVS, enabling it to enter the e-commerce segment As a result of this transaction TOTVS will pay R$ 19.4 million for up to 72% of the capital, and Brazilian investment firm Ideiasnet shall receive an IRR of up to 48% and cash-to-cash of up to 280% for a two-year investment
SAO PAULO, Dec. 3, 2013 /PRNewswire/ -- TOTVS, the Brazilian leader in the development of business management software announced the purchase of up to 72% of the share capital of Ciashop Solucoes para Comercio Eletronico S.A., a company that develops solutions for e-commerce. This acquisition will give TOTVS the 50% block of Ciashop shares owned by Ideiasnet, and 18.5% of the shares owned by management.
TOTVS will invest up to R$ 3 million in the company over the next year, which could increase its share of Ciashop's share capital to as much as 72%. The balance of the shares will remain in the hands of current management. Ideiasnet could receive up to an additional R$ 2 million over the next 30 months, to be paid against a set of targets that were defined for Ciashop
Ciashop is a pioneer in online trade in Brazil, with a software as service (SaaS) cloud platform. With over 70 employees and 1,000 active online stores, the company has a business model where over 80% of its revenue is recurring revenue. During the course of its 13-year existence, the company has offered innovative technology based on open, highly scalable architecture. The goal of getting together with TOTVS is to take even more advantage of the accelerated pace of growth of e-commerce in Brazil and Latin America.
"The partnership with Ideiasnet was essential to enable Ciashop to grow and mature; we now feel ready to take this new step! The partnership with TOTVS is strategic to consolidate our growth. Based on our proprietary technology and on innovation we can meet all sorts of e-commerce demands made by TOTVS clients," said Mauricio Trezub, Ciashop's CEO and Founder.
The transaction marks TOTVS' entry into e-commerce, and strengthens the company's strategy to make itself increasingly essential for its clients as it expands its portfolio of solutions for the retail industry.
"By adding Ciashop's e-commerce platform to the existing TOTVS portfolio we will be able to offer a powerful online sales solution to clients of different sizes and in different segments," said Alexandre Dinkelmann, TOTVS Executive VP for Strategy and Finance.
In May 2011, Ciashop received funds from Ideiasnet, a pioneer Brazilian technology investment firm. By purchasing 50% of the company, Ideiasnet was able to support the entrepreneurs, which allowed them to develop the company and increase its exposure in the software industry, which is a priority element of its investment thesis.
"We are happy to support the development of businesses such as Ciashop, given the scarcity of suitable financing options in the local capital market. Entrepreneurs can benefit quite a lot from this type of partnership. This is the first full investment-to-divestment cycle since we took over the company, and reinforces our financial discipline and our focus on serving the industries we know well, and in which we can add value" said Sami Haddad, CEO of Ideiasnet.
This transaction gave Ideiasnet an internal rate of return of up to 48%, and cash-to-cash of up to 280% of the initial amount invested, depending on the earn-out.
"During the course of this 2 1/2 year investment, Ciashop reinforced its market position through organic growth, and invested in product innovation and distribution models. We are grateful to the entire Ciashop team for their hard work and dedication. I am sure that with TOTVS Ciashop will continue to grow in the market," said Everson Lopes, Managing Director of Ideiasnet.
The Ciashop platform is sold through 70 sales channels. Starting now, the solution will also be sold by TOTVS franchisees, increasing the capillarity and driving sales of the solution.
The transaction is subject to approval by Brazil's anti-trust authority, CADE (Conselho Administrativo de Defesa Economica).
A pioneer technology investment firm in Brazil, Ideiasnet invests in high growth companies in industry segments where it has significant know-how, such as digital commerce, software, digital media and mobility. The goal is to offer a tangible contribution and autonomy to entrepreneurs and their businesses. Ideiasnet (IDNT3) stock is traded in the Bovespa Novo Mercado, and its current portfolio produces annualized revenue of R$ 1.6 billion from 11 businesses. The Ciashop sale is the 12th transaction completed since 2011. www.ideiasnet.com.br
Established in 1998, Ciashop is a pioneer in the development of an e-commerce platform in Brazil. It offers integrated SaaS virtual store, hosting, infrastructure and payments gateway solutions. www.ciashop.com.br