27650 - Grupo ASSA

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Summary of Proposed Investment

Project Number

27650

Company Name

GRUPO ASSA CORP

Date SPI Disclosed

Apr 29, 2009

Country

Argentina

Industry

Telecommunications and Technology

Projected Board Date

May 31, 2009

Status

Active

Sector

Computer Systems Design and Related Services (System Integration, Custom Computer Programming, IT Services etc.)

Department

TMT, Venture Capital & Funds

Environmental Category

C - No Impact

Previous Events

Approved : Jun 25, 2009
Signed : Jun 26, 2009
Invested : Jan 22, 2010

Project Description

Grupo ASSA Worldwide S.L. (“Grupo ASSA” or “Company”) is a leading midsized pan-LAC IT services provider that offers:

- Business Process Transformation, including project management office, business process management and people management;
- IT services, software integration and development, including the planning, development, implementation and management of ERPs (JD Edwards Oracle, SAP) systems, applications, and development of customized software applications
- Application Outsourcing, including maintenance and operation of software applications (application management services);
- Integration Technology Services, including SOA services, application development around SAP and Oracle, Web 2.0 and E-Commerce integration and object-oriented development services for Java, Oracle JD Edwards, Java and .Net.

The Company currently has offices and development centers in Argentina, Brazil, Mexico and Chile. ASSA is a recognized regional leader in application management services, with a near-shore/offshore multi-sourcing delivery model and a strong, ubiquitous corporate culture across different countries. It has +700 SAP and JDE consultants, serving over 40,000 end-users more than 30 countries across 3 continents. The company is the largest system integrators for SAP and Oracle platforms in Argentina.

Grupo ASSA is legally incorporated in Spain but founded and with administrative headquarters in Buenos Aires, Argentina.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity	5.0

Development Impact

Contribution to growing the LAC IT sector: LAC represents approximately 3% of the worldwide IT market, and is growing at a strong pace, with CAGR of 12.8% projected for 2007-2011. There is very little venture capital activity in the IT sector in LAC, and even very few IT-specific dedicated VC funds. An investment in ASSA would:

- promote higher-end technology service development in LAC, thus supporting the region’s consolidation trend and - move towards achieving greater efficiencies and economies of scale; and
- provide scarce capital to a young, but growing IT offshoring sector.

Showcase LAC’s potential to develop competitive application offshoring of IT services: The vast majority of the IT offshoring activity has gone to India. Latin America, however, has assumed an important role, especially in the application offshoring trend and the region is becoming increasingly more attractive for US and European companies desiring to achieve efficiency gains from proximity, same time zone advantages, and a well-educated labor force. An investment in Grupo ASSA will support a mid-stage high-growth LAC IT-services company scale up its business and become globally competitive and will demonstrates the ability to produce world-class IT services companies in Latin America, as an alternative to Indian peers.

Job creation: Companies like ASSA benefit local IT professionals through creating high quality job opportunities and developing skills in the value-added IT services sector. ASSA offers an opportunity to LAC’s IT-educated individuals to apply their talents and knowledge to innovative technical solutions in many sectors such as manufacturing, packaged goods and retail.

Provision of long-term growth capital: IFC will provide access to long-term growth capital to a second-tier LAC company which continues to face difficulties to fund its growth plans due to the limited availability of long-term capital in the country where it is headquartered.

Access to IFC’s global expertise: IFC has accumulated considerable expertise related to IT services and outsourcing; an expertise that is unmatched in emerging markets and that ASSA appreciates and wants to tap into. IFC will provide global industry knowledge on best practices, benchmarks and trends in key IT markets, as well as guidance on potential acquisitions and implementation of best practice procedures, particularly regarding growth strategy and corporate governance standards.

IFC’s stamp of approval: Having IFC as an investor will greatly help ASSA in mobilizing new capital from the few capital resources available, mainly because of the attractive terms secured for IFC’s investment in ASSA. In addition, Grupo ASSA is positioned to grow significantly; its areas of growth require entering new markets and selling to new clients. Having IFC as an investor will help the Company establish its credibility and provide additional comfort about its financial strength. ASSA is also interested to establish contact and partnerships with similar firms in South and East Asia. IFC, therefore, is expected to have an important role as a strategic partner ready to support the Company through its various growth stages.

Strengthening governance in preparation for a private trade sale or IPO: Grupo ASSA plans for a private trade sale or IPO, and looks to IFC to assist in strengthening its governance, identifying potential independent directors, and other activities as needed, which will, in turn will boost its credibility to future buyers or investors.

Contacts

For Inquiries About the Project, Contact

Paul Dougall, VP of Corporate Development
Ing Enrique Butty 220
Piso 15 – C1001AFB
Buenos Aires, Argentina

T: 54-11-4510-7224
E: pdougall@grupoassa.com
W: www.grupoassa.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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