Desktop advances within the inside of São Paulo with two M&As
Desktop has just acquired Fasternet and IDC, two regional telecom operating in the interior of São Paulo.
The transaction will add 155,000 new accesses to the company, equivalent to 22% of its current base, and places Desktop in 50 cities where it did not yet have operations.
The companies acquired are located in regions adjacent to those in which Desktop operates: Fasternet (the larger of the two) operates in cities such as Tatuí, Cerquilho, Itu and Boituva; IDC operates in municipalities such as Guararema and Biritiba Mirim.
Today’s acquisition is Desktop’s fifth since its IPO in July last year, when the company controlled by HIG Capital raised R$700 million for its thesis to consolidate the interior of São Paulo.
Since then, Desktop has added 360,000 new accesses (counting today’s two acquisitions), more than doubling in size.
At the time of the IPO, it had only 321,000 hits in 53 cities.
At Faria Lima, one of the foundations of Desktop’s investment thesis “is the company’s ability to find densely populated regions with high incomes, but which at the same time have reduced competition. So far, they’ve managed to do this very well. cherry picking,” said Bernardo Guttmann, who covers the company at XP.
The company has told investors that it plans to finish consolidating the state of São Paulo by the end of the year, and then enter cities in the interior of Minas Gerais and Rio de Janeiro.
With an offer of broadband plans with fiber optics and digital TV, Desktop operates in regions where it often competes with large operators. To differentiate, one of the bets is on price. The company has an aggressive commercial strategy, with entry prices starting at R$100.
“They also have very good execution skills. They are able to grow fast and deliver product,” said Bernardo.
Desktop is worth R$822 million at B3. The stock has dropped 57% in the last 12 months.
Source: Brazil Journal