TechBooks Inc.

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TechBooks Inc.

3110 Fairview Park Drive, Suite 900
Falls Church, Virginia 22042
U.S.A.
Telephone: (703) 352-0001
Fax: (703) 352-8862
Web site: http://www.techbooks.com

Private Company
Incorporated: 1988
Employees: 4,500
Sales: $78 million (2006 est.)
NAIC: 518210 Data Processing, Hosting, and Related Services; 541990 All Other Professional, Scientific, and Technical Services

TechBooks, Inc., under the corporate entity Tech Enterprises, Inc., is a leading business process outsourcing (BPO) specialist for the publishing and documentation industries. Based in Virginia, the company has several sites in the United States, the United Kingdom, and India. About two-thirds of the company's 3,600 employees are based in New Delhi. Clients include leading publishers such as McGraw-Hill, Prentice Hall, Kluwer Academic Publishers, and Oxford University Press, as well as large corporations and others with data conversion needs.

1988 ORIGINS

TechBooks was formed in 1988 by Rakesh Gupta and his sister Anita. Their original intent was to reprint science and technology textbooks using computerized typography and services such as editing and graphic design. Rakesh Gupta became chairman while Anita Gupta served as CEO.

The company began performing work in India in 1992. TechBooks was not the first Western firm to set up a low-cost operation there—Macmillan (U.K.) started a unit in 1977—but it soon grew to prominence in the emerging BPO industry. Using what future president and CEO Thomas F. Cunningham called the "Delhi Model," labor-intensive programming tasks were assigned to employees in India, where wages for skilled technical professionals were much lower than in the United States or Europe.

Soon great changes were sweeping the publishing business with the use of new electronic media such as CD-ROMs and later, the Internet. TechBooks was poised to help convert existing products to digital distribution; development of cross-media content, with print and electronic distribution planned from the beginning, eventually became the norm.

TechBooks was profitable from the beginning; sales reached $3 million in 1997. During the year, Blue Water Capital LLC of McLean, Virginia, became the first to provide venture capital. The $2 million investment, which gave Blue Water a 20 percent stake, helped launch an expansion drive.

By 2000, TechBooks had 1,100 employees in New Delhi, India, and 500 at operations in Pennsylvania, California, and Virginia. Total revenues approached $60 million in spite of a difficult environment for tech firms. Its rate of growth was sufficient to land it a spot on the Inc. 500 list of up and coming small companies. Around this time TechBooks acquired a couple of content preparers, including The PRD Group of Shippensburg, Pennsylvania. and The GTS Companies of Los Angeles.

The 1999 acquisition of York Graphic Services Inc. of York, Pennsylvania, had brought TechBooks into the printing business. While the business had a long history (it had been formed in 1953) its ownership by Tech-Books was short-lived. Deciding to focus on cross media and electronic publishing conversions, in 2002 Tech-Books sold the print unit to its manager, Jim Kell, Jr. The business, which returned to its old name of York Graphic Services, then had sales of $8 million a year.

FOCUS ON XML

TechBooks entered a couple of strategic partnerships in 2001. Composition Services Group (CSG) of the Boston area offered experience in financial print production to help TechBooks bring its electronic conversion processes to financial printers. TechBooks soon bought CSG, making it the basis for a new business unit. A new workflow process, XMLpublish, debuted in February 2001. This used eXtensible Markup Language tags to prepare documents for print and electric delivery at the same time.

TechBooks also tapped iArchives of Orem, Utah, for its OCR (optical character recognition) technology. This allowed TechBooks to automatically convert microfilm of newspapers to a fully searchable digital form. It promised to bring into the electronic realm newspaper archives extending back hundreds of years; TechBooks was setting up to handle multimillion-page conversion projects.

Few of TechBooks' peers at the time had an extensive presence both in the United States and in India. The company's U.K. office was becoming a source of much work from British publishers. TechBooks counted more than two dozen major publishing clients, including Cambridge University Press, Elsevier, Kluwer Academic Publishers, McGraw-Hill, and Wiley. It also served large corporations with composition and data conversion projects.

The global electronic content solution market was estimated to be worth almost $10 billion, with 40 percent or less being outsourced to India, which was a huge opportunity, according to TechBooks' CEO at the time, Ranjit Singh. A native of India, Singh had moved to the United Kingdom at an early age but started his career in the United States. He had headed the company since 2003 after stints at tech firms and multinational corporations such as Citibank, where he had been CIO.

NEW MARKETS

Having long supplied educational publishers, TechBooks was preparing to enter the market for interactive learning modules. This was no mere sideline, but integrated with the company's existing business; multimedia course materials were developed from the same materials as textbooks. Rather than turn to a third party, publishers could let TechBooks handle yet another stage of the project. Other growth areas included pharmaceuticals documentation, investor relations materials, and litigation support.

The company continued to innovate in the field of scholarly publications. Its PowerReview technology shortened lead times for the publication of peer reviewed journals. PowerReview facilitated reviewing proofs over the Internet.

TechBooks became involved with the BiblioVault project in 2004. This endeavor, led by a unit of the University of Chicago Press, involved scanning thousands of scholarly books, both current and out-of-print, for digital distribution.

COMPANY PERSPECTIVES

A global provider of high-value e-publishing solutions and world-class content services, Techbooks empowers you with the latest publishing technologies, multi-channel distribution formats, and effective workflows that help unleash the full potential of your information assets. Decades of industry experience, combined with our onshore accountability, offshore operational knowledge, and overall production quality, has made Techbooks the best outsourcing partner for leading publishers. From creating eLearning programs to desktop publishing and accurate data entry to document and data conversion, Techbooks' expertise is always there to keep you ahead of your competition.

BUILDING FOR THE FUTURE

About two-thirds of TechBook's 3,600 employees were based in New Delhi. The company was consolidating its three New Delhi sites into a new 100,000-square-foot development center in 2005. With fresh venture capital funding, TechBooks looked to expand to other cities in India. It bought Maximize Learning, based in Pune, in May of the year. The acquired company provided e-learning solutions and had 400 employees.

The growth of the BPO concept was attracting new infusions of capital. American Capital Strategies, Ltd., which owned 20 percent of TechBooks, invested another $45 million (in equity and debt) in the company's fourth round of funding in 2005. This gave it the money to continue shopping for strategic acquisitions.

The company added more than 1,300 new employees in India in 2005, apart from the Maximize Learning acquisition, and was planning to add yet another 2,000 by the end of 2006. In addition to traditional editorial positions such as editors and graphic designers, the company employed subject experts in technical and scientific fields. Two new buildings were being built in the New Delhi area and in Pune, where the company already had a 26,000-square-foot facility.

There appeared to be ample room to grow in the booming Indian publishing BPO industry, which was valued at $250 million annually and expected to quadruple within a few years. The market for such content development was broadening from its original technical and educational base to children's books and other types of publishing, observed Publishers Weekly. Also, more books were being printed in India for export after being developed there.

TechBooks bought Whitmont Legal Technologies, Inc., in September 2006. Whitmont, based in Los Angeles, was formed in 1991 and specialized in litigation support and electronic data discovery services. It had more than 300 employees at its dozen offices in the United States.

KEY DATES

1988:: Rakesh Gupta and his sister Anita form Tech-Books to reprint science and technology textbooks.
1992:: Company begins operations in India.
1997:: Expansion drive begins with company's first venture capital; sales are $3 million.
2000:: TechBooks makes the Inc. 500 list with sales of $60 million.
2001:: XMLpublish introduced.
2005:: E-Learning specialist Maximize Learning of Pune, India, acquired.

ROOM TO GROW

TechBooks was only just beginning, according to chairman Rakesh Gupta. It had the stated goal of becoming the largest content services company in the world. A new logo was being prepared to accompany the next stage in the development of TechBooks, which was beginning to describe itself as a "content transformation company." The company continued to look for acquisition targets and there was talk of a possible initial public offering. A move to a new, larger headquarters in Falls Church, Virginia, was accomplished in the fall of 2006. The company had also just opened an office in Australia.

Frederick C. Ingram