Sascar Acquisition Presents Opportunities for Both Local and International Investors

Reports say that Michelin, one of the largest tire manufacturers in the world, has recently announced its interest and intent in buying all outstanding shares of Sascar, leading management and transportation solutions provider in Brazil. Michelin agreed to buy the company for 440 million euros with the goal of tapping into the rapid growth of the fleet and transportation management industry not only in Brazil but also in other areas in South America. The contract also includes assuming Sascar’s debt of 80 million euros.

This move is in line with Michelin’s business strategy to expand across emerging markets such that of telematics, fleet management, tracking and tracing services that utilizes M2M communications, as well as other markets where the demand for vehicle and auto-related services should develop in the future. The acquisition enables them to extend service offerings for truck operators and speed up the growth of its business in Brazil. In turn, this will allow Sascar to have access to the largest tire manufacturer’s customer base in South America. The acquisition, however, still needs approval from the Brazilian competition authorities.

According to Chief Executive Officer of the Michelin Group Jean-Dominique Senard, “Michelin will benefit from the client base and technical and marketing skills built up by Sascar in the rapidly expanding telematics market for professional truck fleets and thereby accelerate the development of services for its customers worldwide. This will help us strengthen an important area of growth for the Group.”

Parlacom Brazil, one of the leaders of the Brazilian Machine-to-machine market that also offers GPS vehicle tracking services with its highly customizable cloud-based platform, thinks that this is a good move for Michelin. LeadingQuest and Parlacom Founder and CEO, Clovis Lacerda said, “This is a hint that investors globally trust that Brazil is a great investment, especially its M2M market.”

“There are several vertical markets in Brazil that have not been completely explored. Say for instance, the residential and commercial security sectors. Apart from the manufacturing and industrial sectors in the Brazil that drive most of the M2M communication services in today, security is on top of the list of services that are highly in demand. These are that areas that both local and international investors are welcome to put their money on as they are far from reaching their saturation points.” Mr. Lacerda said.

“The country is yet to reap the benefits of these multi-million dollar investments. Acquisitions such as that of Michelin is good for the local market. And it provides local enterprises the chance to expand their service offerings and the potential to gain more profit is great.” He added.

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