C.N. Madhusudan knows how to help companies grow.
The Indian businessman and 16-year Atlanta resident led the establishment of the North American headquarters of IT and software training company NIIT in the Georgia capital in 1991. Eventually, he orchestrated many of its campaigns to acquire other companies in the U.S. and Europe.
Now, with a new venture called VectorSpan Inc., Mr. Madhusudan is striking out on his own, using his extensive experience with mergers and acquisitions to aid companies looking to build their companies through “inorganic means.”
In other words, Mr. Madhusudan specializes in assisting companies that have nowhere to grow but outward, particularly those looking to integrate with other companies across borders.
Economies have become more interdependent in the global economy, and international transactions have become a viable option for more companies with the cash to invest, Mr. Madhusudan said.
But while they can be profitable in the long run, such agreements are complicated and pose significant risks for companies that don’t have a grip on the new market they’re entering. Cultural challenges, labor issues and market behaviors all could derail what initially looks like a promising transaction, he said.
“Unless there is somebody who can help you understand what happens in a market you’re not used to, you can make expensive mistakes,” Mr. Madhusudan told GlobalAtlanta in a recent video interview.
Madhusudan feels that given his Indian background, operations and deal-making expertise as well as his base in Atlanta, he’s in a prime position to take advantage of growing U.S. ties with India as well as Indian companies’ widening appetite to purchase companies throughout the globe.
It has taken a remarkable transition for the Indian economy to produce companies able to confidently attract Western suitors and, more recently, to begin acquiring American and European companies on a large scale, he said.
In the early 1990s, India was known for its “Permit Raj,” a highly regulated environment in which any business actions were subject to inconvenient bureaucratic interference in the way of excessive fees and permits.
“To sneeze you needed permission from the government,” Mr. Madhusudan said of the era.
The oil crisis brought on by the war in Kuwait compounded this problem, as did the tendency of larger companies to corner the permits, limiting smaller enterprises’ ability to compete, he added.
But liberalization and economic reform in the middle of the decade led to rapid economic growth, and many Indian companies, including NIIT, came out of the post-Y2K global recession with healthy balance sheets.
“As growth started to increase, the key question for us was how to keep this growth engine going,” Mr. Madhusudan said. The answer lay in mergers and acquisitions.
It took Indian companies awhile to build credibility in the new markets, as many sellers sell were still skeptical of Indian buyers. Even if the Indian company looked great on paper, sellers worried that in the aftermath of the Permit Raj, closing the deal might face too many hurdles, Mr. Madhusudan said.
That stereotype still persists today, although to a lesser degree as Indian companies have begun to make big moves in the automotive and service sectors.
One of the most recent examples is Indian automaker Tata Motors’ acquisition agreement with Jaguar Land Rover, a U.K.-based unit of Ford Motor Co.
If Mr. Madhusudan is right, that deal is indicative of how India is a permanent pillar among the world’s emerging economies.
“The pace of inorganic growth from Indian companies has been very, very significant, and it looks to me that this trend is here to stay,” he said.
Click on the video links above to see Mr. Madhusudan discuss his background and his company’s objectives.