Meet IIT-Madras alumnus Prem Watsa, iconic BlackBerry’s new owner

Forty two years after he migrated to Canada, V. Prem Watsa, who was then just another IIT engineer in search of an MBA, now holds the future of an ailing, but still iconic BlackBerry in his hands. On Monday afternoon, a consortium led by Fairfax Financial Holdings, Watsa’s flagship company, bid $9 a share to buy out Blackberry.

A 1971 batch IIT-Madras graduate in chemical engineering, Watsa arrived in Canada with little more than pocket change with which to pursue his dreams. He did his MBA from the Richard Ivey School of Business at the University of Western Ontario.

Since then, he has made a name for himself, mostly as an investor who identifies distressed and undervalued assets, bets on them, and reaps returns. Fairfax Financial Holdings, an insurance-cum-investment company that Watsa founded in 1985, went on to become Canada’s most profitable company in 2008.

“I know he is an ardent admirer of Warren Buffett and is sometimes referred to as the Warren Buffett of Canada,” says MG Venkatesh Mannar, the Ottawa-based President of The Micronutrient Initiative, and Watsa’s senior at IIT-Madras. “I remember him then as a shy and reserved person (maybe he still is).”

Funds for Alma Mater
Watsa, Mannar says, has made significant contributions to the IIT-Madras Alumni Fund. Despite a couple of recent lacklustre years, Fairfax Financial Holdings’ revenue crossed $8 billion in 2012, up over 7% from a year earlier, with net profit at $532.4 million and nearly $37 billion in assets, spread across pulp mills, specialty retailers, and restaurant chains. Its stock price has compounded at 19 percent annually.

Watsa, 63, and one of the wealthiest individuals in Canada, is reclusive by nature and limits public appearances mostly to Fairfax’s annual shareholder meetings. However, his company’s latest move – a $4.7 billion bid to buy smartphone maker BlackBerry, has put the spot light on the Hyderabad-born billionaire. BlackBerry is by far the most high profile company in Canada and Fairfax – short for fair, friendly acquisitions – is its largest shareholder with around a 10% stake. Fairfax raised its stake in Blackberry from 2 percent in January 2012 (when he joined the Blackberry board) to 10% by mid-2013, during a period when the company stock prices were on a decline.

Last month, when BlackBerry announced it was exploring options for a sale, Watsa resigned as a director on the Blackberry board, citing potential conflict of interest. This was read as a statement of intent to mount a bid for the company.

Watsa has been a strong believer in BlackBerry from the time he started buying its shares. “The brand name, a security system second to none, a distribution network across 650 telecom carriers worldwide, a 79 million subscriber base, enterprise customers accounting for 90% of the Fortune 500….are all formidable strengths..” he wrote in a letter to Fairfax Financial shareholders this March.

Truck Start
His professional career started in 1974 at the Confederation Life Insurance Co. (CLI) in Toronto, where he stayed till 1983, rising to become the company’s vice president. After a short stint at GW Asset Management, he founded his own asset management company – Hamblin Watsa Investment Counsel Ltd. (now wholly owned by Fairfax) – along with his former boss at CLI and three others. In 1985, Watsa bought over Markel Financial, a Canadian company specialising in trucking insurance, and later renamed it Fairfax Financial Holdings.

Watsa’s mantra of risk-averseness and long term view has stood him well over the years, but it’s his eye for the big picture that enables him to see investment pitfalls and financial crises way before others, say observers. He was among the first to predict the crash of 1987, the Japanese collapse of 1990 and the 2008 sub-prime mortgage crisis in the US.

Source: The Economic Times (Online Edition), September 25, 2013

BlackBerry maker knocks on engineering colleges’ doors for apps

BlackBerry, which is considered to be the phone of the businessmen and professionals, seems to have set its eyes on the youth. While launching models to attract them, the Canadian company Research In Motion (RIM) has begun an initiative to keep the youth engaged in developing apps (applications) for the BlackBerry community across the world.

The company has decided to tap the engineering students in India to strengthen the developer ecosystem. “We have already 2,000 applications specially developed for Indian market by local developers. There are over 26,000 developers in India,” Ms. Annie Mathew, Head (Alliances and Developer Relations) of RIM India, said.

Addressing a press conference, she said the company had launched a pilot in Tamil Nadu where in engineering students from 10 universities were invited to take part in the BlackBerry Summit. “They will be given relevant tools to develop Apps. They will get prizes at the end of the competition,” she said.

The company, which covers 625 telecom networks across the world, saw no act of sabotage in disruption of services that had kept millions of users out of the Web for a few days. The firm was getting to ready spend a fortune on the applications that it was going to offer for free for its users beginning Wednesday night.

The $100 candy of applications was aimed at pacifying the outraged users across the world. The BlackBerry users were getting messages from the firm about the freebie. People could choose from a bouquet of applications drawn from various segments of utility. When asked what could be the financial impact of the outage, RIM representatives said that they were yet to estimate that. “But we will have to pay to developers of the apps that we are giving free of cost,” they said.

Source: The Hindu Business Line, October 20, 2011

BlackBerry ties up with EdServ for mobile education

Eyeing leadership status in the mobile education space, Chennai-based education support services company EdServ has tied-up with BlackBerry to provide online education content on smartphones. EdServ’s wide range of educational content on its flagship education portal, http://www.Lampsglow.Com, will now be available in an application, ‘HumThum App’, in the BlackBerry Apps Store of BlackBerry smartphones worldwide, said EdServ Chairman and CEO S. Giridharan.

“Through this tie-up with BlackBerry, we will provide the entire online education content that includes tuition, academics, skill development and test prep services on the BlackBerry smartphone,” he told PTI here. EdServ is targeting a customer base of one crore and revenues of Rs. 200 crore (Rs. 2 billion) from mobile learning services within the next three years and is eyeing leadership status in the mobile education space, he said.

EdServ’s ‘HumThum app’ has a PDF converter that will change the BlackBerry smartphone into a mobile scanner or a photocopier. HumThum app also has a ‘Talking Dictionary’ that will provide pronunciation and the meaning of any English word.

On the overall growth proje ctions for EdServ, he said the company expects to register a 50 per cent growth in revenues this year and is targeting to end the year with revenues of Rs. 180 crore (Rs. 1.8 billion), compared to Rs. 122 crore (Rs. 1.22 billion) last year. It expects to maintain profitability at 30 per cent of the topline and is targeting a profit after tax of Rs. 55 crore (Rs. 550 million) this year. EdServ expects 100 per cent growth in customer traffic on its portal, http://www.Lampsglow.Com, this year, he said. The customer base was also expected to more than double this year from the existing customer base of 150,000, he said.

Answering a query about investment plans, Giridharan said the company was finalising plans to raise capital for ongoing expansion and infrastructure development and the funds could be raised through Foreign Currency Convertible Bonds and GDRs to be rolled out by the middle of August this year.

Source: http://www.smartinvestor.in