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| Softwell |
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| Summary of Proposed Investment |
| 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. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 29428 |
| Company name | Softwell Solutions em Informatica Ltda. EPP |
| Country |
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| Sector | Professional, Scientific and Technical Services |
| Environmental category | C |
| Department | Global Inform. & Comm. Tech. |
| Status | Pending Disbursement |
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| Date SPI disclosed | May 11, 2010 |
| Projected board date | June 11, 2010 |
| Previous Events | Signed: July 1, 2010
Approved: June 30, 2010 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Softwell Solutions em Informatica Ltda. (“Softwell”) was launched in 2007 in Salvador, Brazil. The Company owns a suite of software products called Maker, created to facilitate and accelerate new software development. Softwell’s clients include Brazilian IT service companies, IT departments of government institutions and private sector companies (especially small and medium enterprises) that have a need to develop customized software applications to run their businesses.
The proposed project consists in the deployment of the Company’s product road map and in funding Softwell’s capital requirements for expanding its operations domestically and internationally. The project will be funded through a financing round of up to $9 million, of which IFC will invest up to $4.8 million.
From a developmental standpoint, it is important to support the growth of software companies such as Softwell, as their products have a potential to reduce operational/transaction costs of IT software clients both within and beyond Brazil. Further, supporting software companies would enable Brazil to move up the value chain in the global IT space, provide quality employment opportunities in leading edge technology development, and help demonstrate the ability to produce world class software in emerging markets. |
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| Project sponsor and major shareholders of project company |
| Softwell is 70% owned by its founder, Wellington Freire, and 30% owned by his son, William Freire. Mr. Wellington Freire is also the Company’s CEO. Mr. Wellington Freire is a reputable entrepreneur who has been active in the IT market since 1985 as CEO and shareholder of Freire Informatica, an IT services company focused on municipalities and local governments in the state of Bahia. |
| Total project cost and amount and nature of IFC's investment |
| The proposed project consists in the deployment of the Company’s product road map and in funding Softwell’s capital requirements for expanding its operations domestically and internationally. Total project cost is estimated at $11.1 million of which IFC and one or more co-investors to the satisfaction of IFC shall provide up to $9 million by subscribing preferred equity into the Company. |
| Location of project and description of site |
| The Company is headquartered in Salvador, Bahia, and has commercial presence in Sao Paulo. Currently, its direct international presence is limited to Portugal and Spain, while an indirect distribution agreement covers Angola. |
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| Anticipated development impact of the project |
An investment in Softwell will have, in particular, the following key development outcomes:
Promote higher-end technology product development in Brazil, thus supporting the country’s move up the value chain in the technology space;
Address local market demand for IT software and services across a wide range of industries and contribute to Brazil’s nascent software export industry;
Benefit local population in the state of Bahia through job creation and skill development;
Help a successful entrepreneur-led business to develop and retain highly skilled labor in Brazil;
Lower software development and maintenance costs for local companies; and
Reduce energy consumption (measured in KWh) utilized in the development of software applications. |
| IFC's expected development contribution |
Access to Finance: IFC will provide risk capital otherwise unavailable for early stage IT product companies in Brazil.
Mobilization: IFC will mobilize additional funding from top private investors to co-invest in Softwell.
Institute good corporate governance and best practices: Softwell is committed to improving its corporate governance and its compliance in areas where IT companies traditionally underperform (e.g. information reporting). This would boost the Company’s credibility to future investors. IFC is recognized as a leader in these areas and will provide substantial value added through its investment. |
| Environmental and social issues - Category C |
| By eliminating coding and documentation, Softwell saves materials, energy, and carbon emissions. The level of environmental and social risks in this project is minimal, so it is classified as Category C. In case Softwell decides in the future to construct new facilities, it will be required to provide prior notice to IFC and commit to complying with IFC Performance Standards. |
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| For inquiries about the project, contact: |
Ian Cunha
Business phone: +55 71 9995 9335
E-mail: ian@softwell.com.br
www.softwell.com.br
German Cufre (Transaction Leader)
Investment Officer
International Finance Corporation
2121 Pennsylvania Ave, NW
Washington , DC 20433 USA
Tel: + 1 202 458 1318
Fax: + 1 202 974 4403 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
| Not applicable as there are no Environmental and Social Issues related to the project. |
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