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| Joint Venture |
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| Pierian and the
client will form an independent company at an agreed ownership
ratio in Bangalore, India. The JV entity will be subject
to Indian laws, which the client will need to understand
thoroughly (essentially adds to cost & risk). |
Equity is kept to
a minimum in the initial stages. The client brings in
investment and Pierian will provide the management capability,
setup systems and processes, methodologies, regulatory
interactions, etc.
The unit will start with hiring key employees under the
JV entity. The scaling of people resources will be done
by Pierian in consultation with the client. On-demand
scalability at agreed SLAs can be done. |
| Pierian will operate
the JV entity. The JV will report into its own board,
but day-to-day operations will be taken care of by Pierian.
The JV entity will have limited value in either balance
sheet, as the client will be the sole customer. The JV
entity will also essentially be a cost center for the
client. |
| On pre-agreed trigger
points, transfer of ownership to either party can be done
at pre-agreed valuation. The managerial bandwidth required,
the size of the JV entity, employee retention, regulatory
compliance, etc makes this option viable only in certain
special circumstances. |
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