By Jeffrey T. Lewis
SAO PAULO--Brazilian business technology and services company Totvs SA and Itau Unibanco SA have agreed to form a joint venture that will provide a digital financial services platform aimed at small- and medium-sized businesses.
Each company will own 50% of the venture, named Totvs Techfin, Totvs said after the close of trading Monday. Totvs will provide expertise and assets of its existing techfin operation and Itau will contribute financial services and funding for the new business, Totvs said.
Itau will also contribute 200 million reais, the equivalent of $43 million, to the new company's capital stock and will pay as much as 860 million reais for shares in Totvs Techfin, Totvs said.
The collaboration should boost Totvs's efforts to expand the products it offers clients, said Marco Nardini, an analyst at XP Investimentos, in a research report. XP reiterated its buy recommendation for Totvs shares and its year-end share-price target of 48 reais. Totvs shares closed at 35.80 reais on Monday, and Itau shares closed at 26.09.
"We see this JV as a positive one as it is in line with the company's strategy to offer a wide range of financial products in the B2B market," Mr. Nardini said.
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(END) Dow Jones Newswires
April 13, 2022 09:09 ET (13:09 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.