Business

In a series of acquisitions after its IPO, Brazil's Locaweb acquires Curitiba-based Connectplug for BRL 18 million

Connectplug operates a SaaS platform with POS and a management system

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  • ConnectPlug presented strong growth in 2020 and generated recurring annual revenue (ARR) of BRL 4 million;
  • The founding partners of ConnectPlug will remain in the ConnectPlug operation with Locaweb’s unit.

Brazilian Locaweb, which operates web services, announced the acquisition of the Curitiba-based startup Connectplug for BRL 18 million. Founded in 2015, the startup operates a SaaS platform with POS and a comprehensive management system.

Rafael Chamas Alves, CFO of Locaweb, stated in a material fact to shareholders that Connectplug has a large presence in the food services segments and the platform provides important features, such as an ordering and delivery manager integrated with many marketplaces, a seamless self-service solution to support clients ordering in stores or restaurants and digital table menu for low-touch order process fully integrated with ConnectPlug’s KDS (kitchen display system).

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“Initially crafted to support food services companies, the platform became strongly present in other segments, focused on SMEs, due its completeness, easy-to-use interface and integration capabilities. With this acquisition, Locaweb, which already has the most complete ecosystem of digital solutions for SMEs and a strong presence in food services market through Delivery Direto, strengthens its portfolio and enters in a new segment of digital services for brick and mortar businesses and expand possibilities of cross-selling with Tray’s clients,” he said.

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ConnectPlug presented strong growth in 2020 and generated recurring annual revenue (ARR) of BRL 4 million. At this period the company also played a role in helping companies to transform themselves digitally.

Alves explains that with this acquisition Locaweb reaches a new market and expands the group’s capacity to offer omnichannel solutions. “ConnectPlug allows merchants to take advantage of all the features that a SaaS system delivers, with a vast capacity for issuing invoices from all
Brazilian’s locations, business intelligence reports and the possibility of working offline for remote internet access locations.”

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Following the Locaweb’s operating modeling other acquisitions, Mrs. Rafael Hasson, Bernardo Faria Marques and Edson Procopio Junior, founding partners of ConnectPlug, will remain in the ConnectPlug operation, within the company’s unit.

The closing price for the acquisition of all quotas of ConnectPlug is BRL 18 million, but it is subject to certain adjustments of net debt and working capital, which are usual in this type of transaction.

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Additionally, part of the sellers may be entitled to receive an earnout, depending on the achievement of certain financial goals based on the net operating revenue of ConnectPlug.

According to Alves, the acquisition was already concluded and it is not subject to approval by Brazilian antitrust watchdog (Cade) because it didn’t meet achieving requirements for Cade‘s need to approval.