TACT ventures into digital space with an impressive acquisition - The Noel D'Cunha Sunday Column

Why did CMS decide to divest their printing arm to TACT?
They wanted to focus on their core IT services business. Hence they decided to divest their print and training institute profit centres.

What does CMS gain from this print acquisition by TACT?
As investors in growth opportunities, we evaluate a number of business proposals that come our way. The print business presented an opportunity to grow the book printing side/ In the book space we are scratching the surface while maintaining a strong position in the VDP offering.

Are there targets for CMS 2.0? In terms of print revenue and outreach?
While we intend to maintain our position of strength in the VDP business, our objective in 2019-20 would be to grow the short-run book printing pie significantly. We could be looking at a year-on-year growth of 30-40% over the next three years.

You are looking at books; does this mean diluting some of the VDP outreach at CMS at the nine locations and shifting resources to book printing?
Not at all. We remain strong in VDP with some marquee clients in the telecom, banking and insurance space. Telecom is a declining sector (the choice of a digital statement is catching up fast) but there are opportunities in the insurance sector that can compensate the possible de-growth.  

"We remain strong in VDP with some marquee clients in the telecom, banking and insurance space"

How does this strengthen TACT which is primarily focused on human capital?
Besides its intense focus on human capital enrichment, TACT is also a well-capitalised funding arm. Bringing the institute and print business of CMS under its banner helps it leverage on its core strength as far as institute business is concerned. The print arm will provide the additional leverage of content repository management, internal printing needs and catering to other group companies as well.

Define TACT's role now with CMS? Will it be strategic? Or a relook at the cost base? Or tweak the management structure?
Our initial task would be to maintain the momentum that the firms bring with them and subsequently relooking at the operations in-depth to structure them for growth. This would entail fresh investment where necessary and make changes to the working structure to bring in efficiency and increase the productivity.

Which are the synergies that will be leveraged?
The TACT management is hungry for growth and relevant steps (investment + restructuring if necessary) would be taken to boost the growth. The print side has several opportunities to scale business and strategic investments would be made as and when necessary to provide the necessary impetus.

How does TACT view the book industry, nationally and internationally?
We see significant potential in the short-run book printing segment. Given the fact that print run for several books – fiction, selective educational titles are moving away from offset because of shrinking volumes, the short-run printing will have several opportunities.

Do you see a lot of consolidation in print?
There could be strategic moves by print players to join hands or acquire print firms based on the area they want to penetrate or strengthen. Is it going to be a big number? … we don't think so at least in the near future.

And finally, what kind of conversation will we have, if we meet on 15 March 2020?
We would be talking about further investments in key areas within the business to seek exponential growth.