Buying Komatsu Soft to correct a finance-heavy customer base (2000)

Buying the imbalance in order to fix it

What distinguishes the Komatsu Soft acquisition is neither its price nor any novelty of technology, but the fact that the target chosen was the one that filled the buyer’s own weakness exactly. The banking and card customers handed down by its Sanwa parentage were the company’s strength and, at the same time, a reason it found it hard to move outside them. Taking on a manufacturer’s IT subsidiary whole meant acquiring customers and engineers at once — and also taking on a low-margin organisation. When President Funaki described his criteria as “customer base and technology,” that can be read as a statement of sequence: look at what is missing before you look at the price.

That way of choosing largely set the shape of TIS afterwards. Widening the industries it served by acquisition, and using scale to reach for the prime-contractor position, runs unbroken from here to the 2008 combination with Intec Holdings. Each time, the question of how to lift the acquired company’s profitability was left standing. Managing by buying what you lack is fast; raising what you have bought to your own level is not a problem speed can solve. How to handle the gap between the two is the question that began in this period.