What drives the dispute between Stone and Totvs
For some weeks, there has been news about a fierce business dispute involving three companies little known to most Brazilians. Stone, a card processor, made a R$6.4 billion offer for a software company, Linx. When it saw the size of the deal, Totvs, Brazil's largest software maker, also made an offer for Linx.
The largest card acquiring company in Brazil, Cielo, a joint venture of two of the three largest banks in the country, Bradesco and Banco do Brasil, went to the Cade, the antitrust watchdog, to complain as interested party in the possible acquisition of Linx by Stone, its competitor. In its arguments, Cielo said the deal could raise entry barriers in the market of management software. It also complained of the possibility of cross-sales of the packages that the combined company would offer.
The most interesting in this dispute is that it is taking place amid an economic crisis that has already lasted seven years. What then motivates this multibillion-real dispute that, as everything in this country, may end up in court?
The answer is simple: the battle waged at this moment is about what the huge market of credit cards, fund transfers, payment systems, digital coins and whatever may arise in the always innovative and revolutionary digital world.
And what is Linx? It is the bride in the dispute. Founded in 1985 as Microserv Comércio e Consultoria. In 2004, it changed its name to Linx S.A. It has acquired 33 companies since then.
Linx's revenue is 84.4% recurring. At this moment, it is eyeing ten companies for acquisition and is already in negotiation with eight. Therefore, it has concluded the strategy and financial analysis of the deal. Its strategy is always to make acquisitions plus organic innovations to build the end-to-end platform on which clients have control over all steps and their chains.
"Retailers may sell in-store and online, process payments and manage their operations in a centralized way," one source at the company says. "It is a model built for retailers with local expertise and knowledge; on-demand cloud platform, scalable and flexible; it simplifies processes in an efficient and easy to install way; has single view of clients and inventory between channels; and advanced analytics and intuitive reports."
But why this concept has been becoming increasingly popular among companies? To understand the reason, first it is necessary to understand what end-to-end is and what its benefits are. In a simple way, we can say...
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