An Outsourced Merger Wave?

By Jyoti Thottam

Ever wonder what a global shift in corporate power looks like? Take a look at this month's acquisition of Atlanta-based MortgageRamp, a unit of GMAC (GM's credit subsidiary), by OfficeTiger, an outsourcing firm based in Madras, India. The $25 million deal will expand OfficeTiger's U.S. reach and give it entry into a highly skilled business: real estate. MortgageRamp is critical for banks investing in the superhot real estate market; its employees size up risks in commercial properties, evaluating everything from environmental hazards to tenants' credit profiles.

Industry insiders say this cross-border deal could be a sign of things to come in India's booming outsourcing sector. "There's a growing amount of confidence and growing resources among these firms," says Joe Sigelman, co-CEO of OfficeTiger, which will reach $100 million in sales this year and may go public in 2006. Strong, small firms will swallow others to solidify their positions against Indian outsourcing giants like Wipro and Infosys, says Peter Bender-Samuel, CEO of Everest Group, a research firm. U.S. players like Accenture and IBM Global Services, meanwhile, have a new kind of competitor to worry about, Bender-Samuel says. "It makes life difficult for them." --By Jyoti Thottam