Reported by Victor Godinez of The Dallas Morning News ~~Monday, December 18, 2006 12:30 AM CST ~~
He’ll act as a mentor for an emerging firm in troubled industry.
Morton Meyerson is getting back into outsourcing.
Dallas-based Alsbridge Inc. is announcing today that Mr. Meyerson has made a multimillion-dollar investment in the firm and is joining the company’s board as a non-executive chairman.
Alsbridge doesn’t do outsourcing itself, but advises companies on picking outsourcing partners.
Mr. Meyerson said the investment gives him a chance to solve some of the problems afflicting the outsourcing industry.
He once ran Electronic Data Systems Corp. and Perot Systems Corp.
“So I just watched this thing grow,” he said. “It went from hundreds of thousands of dollars and into millions and billions. But it’s gotten so sluggish, and everyone is so unhappy.”
Mr. Meyerson said he invested in Alsbridge because the company’s chief executive officer, Ben Trowbridge, has a plan to alleviate the friction that often occurs when a company is displeased with the outsourcing services it has paid for, which can be anything from payroll processing to information technology help desk services.
Mr. Meyerson acknowledged that this investment is a change from his previous deals.
“For me to make a commitment of multiple millions of dollars into something that has historically been or recently been a low-margin, low-growth area I guess is a little different,” he said.
Mr. Meyerson declined to state the precise value of his investment.
Mr. Trowbridge said that outsourcing contracts now go almost exclusively to the lowest bidder, and that has resulted in lower quality service and, often, higher costs than initially expected.
“It is a mature industry for the providers, the EDS’s and the others,” he said. “But we’re a growing, innovative company that helps those maturing companies change in how they work with their clients.”
Mr. Meyerson said his title – non-executive chairman – means he won’t be involved with the company’s day-to-day affairs, but will serve more as a mentor for Mr. Trowbridge. He said he’ll be dealing with “strategy, relationships, competition, Sarbanes-Oxley, issues like that, rather than what are this month’s financials, etc.”
Mr. Meyerson said he decided to invest after watching Mr. Trowbridge, who once worked at EDS, get Alsbridge off the ground.
“He stayed with the program, and guided this company through very tough storms and into a safe port, and I was quite impressed with that,” Mr. Meyerson said.
Alsbridge is privately held. Mr. Trowbridge said the company will soon cross the $10 million threshold and is hiring heavily.
Mr. Meyerson also said that his investment isn’t about generating a windfall for himself.
“I actually invest to create an economic return that I put into our family foundation,” he said. “So this is a funding mechanism to try to stimulate in the nonprofit world good things happening.”