Small and niche – make a good fit
Over the last few years, there has been a trend among Indian service providers to build complementary capabilities by acquiring smaller publishing service companies in the US. Naturally, the all-time-low valuations have helped seal deals faster for service providers, who are looking to complete the missing piece of ‘high-value content’ in the end-to-end service provider puzzle.
Some of the recent acquisitions include:
- Laserwords’ acquisition of US-based Four Lakes Colorgraphics
- diacriTech’s acquisition of LaurelTech Integrated Publishing Solutions, specializing in El-hi, College and Professional publication areas.
- S4 Ind’s partnership/merger with Carlisle Publishing Services to gain entry in the educational, trade and publishing segments
Of course, not all past acquisitions by large vendors in the outsourcing industry have been successful. This is not merely because of fitment issues in terms of size and capability, but also because handling employee integration issues across borders – cultural or otherwise, is a challenge. The resentment associated with job losses (as a means to remove redundancies) within the acquired company and low morale often lead to limited success in larger (and hasty) acquisitions.
Acquisitions targeted at smaller overseas companies that have niche capabilities – developmental editing, designing, etc. with an attractive client pool could prove more beneficial for offshore vendors. The investment in such companies is likely to yield faster and better ROI, at least in the near-term. Minimal to nil job losses would create a healthier climate for integration. Instant addition of an otherwise capability lacuna on home turf enables the vendor to capitalize on high-value opportunities much faster.
Last 5 posts by Aradhana
- India: From a service hub to a potential market? - April 30th, 2010
- Satisfaction with outsourcing: Educational vs. STM publisher - March 10th, 2010
- So where is the talent hiding? - February 3rd, 2010
- The yin-yang of publishing outsourcing - November 12th, 2009
- The content-technology tussle - October 12th, 2009
