Indian firms explore M&A opportunities in Latin America

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Indian firms explore M&A opportunities in Latin America
Bangalore: The top Indian outsourcing companies are now exploring acquisition opportunities in the Latin American countries, as increasing number of customers are demanding near-shore delivery capabilities for physical proximity and ease in managing these relationship, reports The Economic Times.

Small service providers in Brazil, Argentina and Mexico like Globant, which has customers including Adidas, LinkedIn and Citi and around $100 million in revenues, is increasingly being approached by some Indian technology companies, some officials informed requesting anonymity.

"Even as we hire more locals, we continue to look at focused nearshore companies such as Globant for strategic alliances," said a top Executive of an Indian firm. He also requested anonymity because his company does not want to disclose its acquisition plans before they are materialized.

As customers like GE and Citi continue to send more IT work to India, some customers and vendors are discovering that near shore locations in Latin America are offering almost similar cost advantages for back end projects apart from better proximity.

The customers such as HNI, one of the biggest American office furniture manufacturers, recently chose a near shore partner in Brazil instead of an outsourcing vendor from India because it was not comfortable with the difference in time zone.

"While there is no doubt about Indian companies' ability to serve customers across time zones, some customers still prefer to work with a vendor located nearer," said an Outsourcing Consultant familiar with HNI's decision.

For the Indian companies seeking to serve customers locally and from nearby locations, outsourcing companies in Brazil, Mexico and Argentina offer lucrative mergers and acquisition opportunities.

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