Summit Notebook

‘String of pearls’

  ”String of pearls” could have different meanings.

It is how MphasiS Chief Executive Ganesh Ayyar refers to the Indian IT services provider’s strategy of going for small to mid-size acquisitions. The bigger ones can become a “noose around your neck”, Ayyar said.

The company, 61 percent owned by Hewlett-Packard, is buying the India-based IT services arm of troubled U.S. insurer American International Group. Ayyar, who spoke to us about the company’s “ambidextrous approach” to business, indicated today that any future acquisitions would be in the AIG ballpark.

DELIVERY CAPACITY 

Ayyar also told us that MphasiS was close to opening its first offshore global delivery center outside India.   He offered us no color, telling us to “let it remain a monochrome.” All we know for now is that this center will be in a low-cost emerging market. Your guess is as good as ours.

Breakfast with SAP, anyone?

If you know 5,500 software professionals in India looking for a job, just send them over to Stephen Watts, SAP’s chief operating officer for Asia Pacific and Japan. The Irish-born Watts, who is also temporarily heading the business software group’s India operations, denied any talk of doubling headcount in India by 2010.

SAP has focused in the past on contracts with large customers but is increasingly turning towards mid-sized companies. While talking to us on a conference call from Singapore, Watts compared small and medium enterprises (SMEs) to breakfast. “Life begins with a good breakfast,” he said, emphasising the importance the company gives to SMEs.

SAP’s high-growth markets in the region are obviously China and India, but potential rising stars, as far as Watts is concerned, include Sri Lanka and Bangladesh.

DEAL TALK 

Watts said SAP is “continuing to look at acquisitions” but he didn’t specify where. References to somewhere on the big planet, which is 70 percent water, can’t exactly be classified as helpful. But then for a person who works from 5 to 9 (and not the other way around), a sense of humour may just be the right elixir.

Love isn’t in the air for now

Technology giants this year have been encroaching on one another’s markets, buying up companies as they try to become one-stop shops for computing, networking and data storage, but Infosys still hasn’t jumped on the bandwagon.

Infosys Technologies Chief Financial Officer V. Balakrishnan compared acquisitions to “falling in love,” saying that one does not generally know when or how it will happen. When we asked about who Infosys was dating, Balakrishnan was noncommittal.

Speaking of love, Infosys is one of the few companies that had a dating allowance for employees, and Cupid’s arrows have been bang on target in the company’s campuses. Balakrishnan wouldn’t tell us whether the allowance has returned with the improved economic climate.

He did seem to support the idea of mid-20-something employees falling in love and tying the knot. Information technology has played a role in removing barriers imposed by the caste system in India, Balakrishnan said.

Maybe the Indian government can take a cue from the information technology giant and look for innovative ways to solve India’s centuries-old caste-related problems?

from DealZone:

Little orphan brandie

B&G Foods Inc wants the small, orphan brands that no one else loves. 

"We have a laundry list and any number companies that we talk to on a regular basis," said B&G Chief Executive David Wenner. "We're buying all these things people don't want to run."

B&G pointed to the success of its acquisition of Cream of Wheat, saying "no one was paying any attention to it. So that's where we come in."

"We're looking for things are aren't commodities. Higher margin products, ethnic foods are great. Las Palmas and Ortega -- they've grown steadily over the years and we love that," Wenner said.

B&G aims to stick to its tried-and-true practice of buying dry grocery products that immediately add to earnings or revenues.

B&G wants to carve out orphan products from larger food companies. When it approaches potential sellers, B&G says "We're able to come in and take these five things  you don't want.  We're able to come in and take these things over very very quickly," Wenner said. 

The company targets smaller brands or private companies. "We're not buying Kraft tomorrow."