I wrote in this column on 2nd May 2010 about my experiences serving in a US based MNC [ software development and consulting business ] which went through five mergers/acquisitions in less than 10 years – The Five T Shirts story . During my stay with this company [ call this company ” K ” ] heading the Operations Branch at Hyderabad , The Corporate HQ in the US considered acquiring three other firms in similar business with HQ in the US and Off shore Centers at Hyderabad where we found strategic business fit . While one of them [ call it company “S “]declined the offer made by us , in the case of the other two [ call them company ” I ” and Company ” V ” ] we found issues with corporate governance and dropped the idea . Subsequently , Our Corporate acquired a BPO Company with its India off shore center at Gurgaon and started combined selling of both software development and BPO value propositions to our clients .
After I left the Organization , there were two more T Shirts for the US Company – the sixth one when the US Company sold itself to an Indian entrepreneur who had a software company in the US – one tenth the size of the company where I served [ he bought the equity audaciously with the help of a major financial institution ] and sold it two years later now to a Japanese Global Corporation [ call it ” N ” ] for a good profit [ the 7 th T Shirt] . The BPO part separated at this juncture .
Two interesting sales happened on the side in the above case – The Japanese Corporation ” N ” also bought the US Company ” I ” , earlier dropped by company ” K ” and another major Japanese corporation ” H ” bought company ” S ” which declined the offer from company ” K ” .
Please note that companies K , S and I as well as V all have good off shore business practices at Hyderabad with ownership from the US and the second part of my ” T ” shirt story brings out another dimension in the Mergers and Acquisition scene – the transfer of ownership and control of major off shore centers from US ownership to Japanese ownership and control .
The above M & A story brings up an interesting point – the declining leverage of US Ownerships in favor of other global ownership and control of software business – in the instant case from Japan . I have also noticed Indian Software majors buying up mid size companies in the US and the Chinese are waiting with bags of US Dollars in their coffers for the KILL .