The reason for our emphasis on strategic fit, along with financial measures, is simple: they are both important. Strategic fit has been given equal weight as value formation.
In Isher Capital, acquisitions are most attractive if they can build upon an existing platform as opposed to standing alone.
Although acquisition activities have played an integral part in such an approach, we have always given priority to value-creation activities in such specialist sectors where we have developed our area of expertise. In our company, our sector is Business Process Outsourcing (BPO), where we have been operating for more than 25 years.
We pay as much attention to strategic alignment as investment firms devote to assessing the speed at which value can be unlocked or margins expanded. Our assessment extends beyond a purely financial perspective and incorporates operational and cultural considerations. This includes evaluating how a company’s customer base aligns with ours, whether its services complement our existing strengths, and whether the entrepreneurial mindset is aligned with a long-term vision.
In some cases, we will consider a BPO that is not yet profitable. We also think about how it runs and its culture. This means checking what their customers are like, if their services fit with what we already do well, and if their leaders have a long-term vision like we do.
Sometimes, we’ll even look at a business that’s not making a profit yet. That’s not a deal-breaker on its own. What matters more is if the business can thrive as part of our bigger picture. We’ll check if there are clients to grow with, if their product makes sense for the market, if their services can get bigger, and if the team can handle future growth, not just manage today’s work.
We’ve worked with all sorts of businesses, from general support centres and call centres to tech support and, lately, AI software that helps with service. This wide range of work has taught us a lot about how different service models change and fit together.
Because of this, our way of looking at risk comes from real-world experience. We’re good at spotting where things might slow down, where tech can really make a difference, and where people will always be key. Isher Capital sees this as a long-term way to invest. We want to build businesses that work well together, help each other out, and keep growing for years. For us, making sure a business fits our plan isn’t a small thing; it’s at the heart of how we invest.