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Paychex Inc. (NASD: PAYX), a payroll processing and professional employer organization firm, extends its footprint into Brazil though a joint venture with São Paulo-based Semco Partners, the companies announced today.
Semco Partners is a portfolio management and investment company that helps global companies enter the Brazilian market. Similar to other Semco Partners joint ventures, the intention of the agreement is that Paychex will acquire Semco Partners' half of the partnership and create a wholly owned subsidiary of Paychex: In Semco Partners’ business model, this typically occurs five to 15 years after creation of the joint venture.
Paychex President and CEO Martin Mucci said Paychex’s decision to expand into Brazil represents a key component of its growth strategy: product expansion through new markets.
Paychex plans to begin operations in São Paulo, Brazil, in the first quarter of 2014. The joint venture in Brazil represents Paychex’s second international operation. In spring 2004, Paychex expanded into Germany, where it currently counts more than 2,300 clients.
The Paychex-Semco Partners joint venture has identified an in-country general manager for Brazil who will report to a four-member board of directors. Paychex board members will be Paychex Senior Vice President and Chief Financial Officer Efrain Rivera and Paychex Senior Vice President of Service John Gibson. Semco Partners board members will be the partners Michel Harari and Alexandre Bonfim de Azevedo.