Information technology company Chinasoft International plans an outsourcing spending spree in China after its US$20 million capital injection from Microsoft and International Finance Corp (IFC) this September. Chinasoft said it had a handful of buyout targets which, if finalised, could help it seize the cream of the mainland outsourcing business, estimated by international research house International Data Corp to be worth US$466 million. Henry Chen, managing director of Chinasoft, said while the mainland outsourcing market was still playing catch-up with India, which dominates the English-speaking outsourcing market, there was still plenty of room to move in non-English-speaking markets such as China and Japan. The company said it was close to appointing an international investment bank to advise it on potential acquisitions and expected to finalise some of the deals by the first quarter next year. 'Only 1 per cent of Japanese companies are outsourcing their information technology business to outsiders. I think the reasonable outsourcing level would be 10 per cent by international standards,' Mr Chen said, adding that one of the targets under negotiation was a Dalian-based company with Japanese clients. He said potential targets should be able to serve Japanese, European or US companies, particularly in the financial sectors, and have headcounts of at least 300. 'Size does matter in the outsourcing world, which means having the capability of handling big clients,' Mr Chen said. Chinasoft currently has 1,000 employees in its outsourcing department. Enterprise solutions still account for 80 per cent of its business with IT outsourcing taking up the remaining 20 per cent. Microsoft and IFC have the option of subscribing to a further US$15 million of Chinasoft's preferred shares.
