The dynamics of acquisitions often go beyond new markets, new geographies and new technologies. "If a company has good domain knowledge or a strong product line, acquiring it enables us to take a strong position in that industry," says Tata Interactive Systems (TIS) chief executive officer Sanjaya Sharma.

That is why TIS, a pioneer in e-learning, decided to acquire Tertia Edusoft GmbH in Germany and Tertia Edusoft AG in Switzerland. The idea was that the acquisition should leverage the company's global position and add to its value proposition for clients.

"We got a very good simulations product called TopSim from Tertia Edusoft GmbH, which is number one in simulations in Germany. With this product we become a stronger player in simulations, an area that we want to grow dramatically," says Mr Sharma. "Right now, it is just 5 per cent of our business, but we want to make it 25 per cent," he explains. TIS has its own library of simulations, SimBLs™, Simulation-based Learning Objects.

Geography and history
The advantage of acquiring these companies, according to Mr Sharma, is that they "help us get into Europe with a leading European company that has the language capability to deal with Switzerland, Germany and Austria." TIS is excited about the possibility of cross-selling in the three countries. Its international team can also sell the products in the US, UK, Australia and Japan.

Strong business principles of the Tata group guided the TIS team in acquiring the two companies. To establish a degree of comfort, the owner of the companies was invited to come to India and meet the senior management team of TIS and Tata Industries. At these interactions, TIS shared its vision and goals and tried to create a common understanding. But what helped most in settling the issue, says Mr Sharma, was the Tata brand.

Lessons in integration
As soon as the transaction was completed in December 2005, the integration plan was put in place. Two key people — from finance and operations — were chosen to co-ordinate the integration.

"Integration is not so complex," says Sharma, "as these are established companies. Our goal is to take the Tata group philosophy to them. Culturally, it's been a good fit, and our interaction has reinforced the bond."

Since the acquired companies have to be integrated into the business excellence process, TIS has delayed its TBEM application by a six-month cycle to give them time to catch up. The company hopes to complete 90 per cent of the integration by June 2006.

Both parties have gained from the acquisition. Wihile TIS has gained access to the European market as well as to the simulations approach to TopSim. The Swiss team on its part has benefited by adding the TIS products to its existing portfolio.

The company is keen on more acquisitions. Armed with the domain skills and markets of its two new European bases, TIS is all set to reinforce its leadership in the e-learning industry.