BABEL completes acquisition of Software AG services division in Spain

• The company is launching its Digital Transformation Solutions Expertise Centre, and has already integrated the German multinational's Software Development Centre in Asturias, where it performs work for clients including Telefónica and the banks BBVA and Santander
• The Spanish digital transformation company remains firmly committed to growth despite the global economic uncertainty generated by the Covid-19 pandemic
• It expects to achieve turnover of more than 100 million euros and to increase its staff by over 2,000 having integrated with the German multinational
• This is the first step in a process that will involve expanding through further acquisitions

BABEL has completed the acquisition of the professional services unit in Spain of the German multinational Software AG. The purchase forms a part of the Spanish consultancy's expansion plans, doubling its size through this transaction. The two companies have reached agreements to increase the presence of the German firm's products within the Spanish market and in all other countries where BABEL operates.

The deal marks the start of a new stage in BABEL's global strategy, underpinning its commitment to become a flagship enterprise in the technology centre. The Spanish consultancy thus remains firmly committed to its growth plans, despite the global economic uncertainty generated by the Covid-19 pandemic.

The aim following integration is by 2021 to achieve a turnover of more than 100 million euros while adding over 2,000 employees, positioning BABEL among the 10 leading Spanish-owned companies in the IT consultancy segment. 

BABEL has launched its Digital Transformation Solutions Expertise Centre (Business Platforms), which will allow it to offer specialised services based on Software AG products (Internet of Things, Business Transformation, Legacy Modernisation, Integration Architectures and Data Streaming). Mapfre, the Spanish Social Security system, Canal Isabel II, Banco Santander, Teléfonica, Correos and Adif are among the clients to benefit from this service.

It has also integrated the Software Development Centre that the German multinational had in the Asturias region within its Production Centre model. The site will undertake projects using a range of technologies (Java, .NET, Liferay, ARIS, DOGMA) for clients such as BBVA, ALSA, SESPA, Liberbank and RTVE.

According to BABEL's president, Salvador Fontán, "the integration of our two companies brings together two groups of professionals with experience in technology solutions for major companies, who share the same dedication to reliability and excellence, creating a firm with greater service capacity for its clients and better career opportunities for its employees. This is an operation offering benefits and enthusiasm all round". 

It represents a bold move by the company, an attitude that has been one of its features since it was first founded. "The health crisis has had a huge impact on our society, and technology is one of the main tools in combating it. Integrating such large groups of people is no easy process, but the existing level of understanding and the desire to achieve greater goals give us faith in a swift and successful process," explains BABEL CEO, Rafael López.
 

Average annual growth of 20%

Since it was first founded in 2003, BABEL has grown by 20% per year on average. In 2019 its turnover amounted to more than 40 million euros. The Madrid-based company likewise increased its workforce to 900 employees. Since it first began operations it has opted for direct hiring on permanent contracts, seeking a long-term relationship based on professional career development for its members within the context of a distinctive corporate culture, founded on continuous, profitable growth in order to take on new challenges.

The majority of BABEL's stock is held by the company's own workers, and it has gradually increased its net equity by reinvesting profits, to the extent that it has barely any need for external borrowings. Part of the calculated monthly profits is distributed among all its employees in the form of a commitment bonus, another part is paid as a dividend to its 55 owners, while a third tranche is used to increase shareholder equity, allowing the firm to finance its expansion.
 

A strategic agreement for both companies

This operation is the product of a competitive process that the German multinational launched in February 2019, before finally opting for the Spanish firm's offer. The acquisition will make BABEL a key player for the German multinational's technologies, which range from digital transformation solutions such as ARIS, Alfabet and webMethods, to Internet of Things solutions such as Cumulocity IoT, Apama, TrendMiner and Zementis, along with such mainframe platforms as Natural / Adabas, with considerable market penetration among major public bodies and corporations.

BABEL operates in Spain, Portugal, Morocco, Mexico, Germany and the United States, with offices in Madrid, Seville, Barcelona, Casablanca, Lisbon, Proença-a-Nova and Mexico City, along with the sites in Tres Cantos, Avilés and Toledo acquired through this operation.

The Spanish firm's plans are to continue growing both organically and through new acquisition operations, to consolidate its position as a flagship consultancy in the markets where it operates.
 

A European byword for IT development

The German multinational Software AG focuses on software product engineering, and has a workforce of 5,000 employees. With a presence in over 30 countries, it closed 2019 with a turnover of nearly 900 million euros, 80% of which comes from product sales. Its main business lines are: Integration and API (with webMethods); IoT and analytics (with new products such as Apama, Cumulocity IoT, TrendMiner and Zementis); enterprise transformation with ARIS and Alfabet; as well as Adabas and Natural (A&N), which have a major presence among public sector bodies and enterprises.

Software AG has two business units in Spain: the professional services division and the product sales division. As a result of this transaction BABEL has acquired the professional services division.