The Aurum perspective – North India based hospitals are an attractive target for South India based hospital companies seeking national footprint. Is M & A activity within the hospital segment in India pushing up valuations?
Bangalore based Narayana Health has acquired the hospital business from Jubilant First Trust Healthcare, a wholly owned subsidiary of@JubilantLifeSciences. The trust operates two hospitals in West Bengal, Kalpataru in Barasat and Rabindranath Thakur in Berhampore which have been transferred to Narayana on a going concern basis as a slump sale. The value of the deal was not disclosed.
@AnandRathiAdvisors were the deal makers.
The acquisition for Narayana is part of the strategic growth plan to expand in the east whereas for Jubilant the sale is to focus on its core businesses in Pharmaceuticals and Life Sciences. Recently, Jubilant Group was also planning to divest its chemical business to trim its debt which stands at $600 Mn and focus on its pharma business in US.
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By any standards India is a large market for most categories. A very, very large market Indeed. And given that across most sectors India is far below global benchmarks, or in many cases, even far below Asian or other developing country benchmarks. The size and the scale of the market opportunity makes India an attractive destination for strategics to consider India as a serious component of their growth strategy for the next decade or two. Many companies with global presence have engaged with India strongly since the 1990s when liberalization opened up opportunities in many sectors to foreign players.
From arms-length relationships to strategic partnerships, many strategics have now taken up serious positions in India, either by investing in and along with Indian majors in that sector or by setting up independent operations in sectors that permit overseas players to start independent operations. Continue reading
Snapshot of the dairy-sector sector in India
The total dairy market in India is estimated to be INR 3,000 bn (USD 60 bn) comprising nearly 40% of the total Food & Beverages market. Of this, the organized dairy segment is just 20% or INR 600 mn.
In this series of articles we share our learnings and insights from over 125 M&A, fundraising and restructuring transactions that the Aurum team has done over the past 2 decades of professional experience. We explore the factors that help speed up the transaction as well as watchouts that derail transactions in which the fundamental value & valuation were not the main cause of the transaction not going through.
Aurum Insights on Reps and Warranties
The quality of Reps & Warranties and Indemnities, and the state of related data is critical to concluding M&A transactions. Incomplete and work-in-progress reps & warranties data, even with honest intentions raise doubts & concerns, which are the primary reasons for buyers walking away from deals. Likewise, poor preparation on reps & warranties make sellers uncomfortable in equity swap deals.
The better prepared the parties are on their respective reps, warranties, indemnities and disclosures, better the chances of a quicker conclusion of a transaction. Continue reading
What can companies learn from this and do founders need to know about M&A
Facebook recently announced that they have acquired LittleEye, an Indian startup that helps developers identify and fix performance issues in their mobile apps. According to Sateesh Andra, Managing Partner of VentureEast Tenet Fund, which invested in LittleEye’s less than a year ago “This is a transformative event for the Indian Product Startup Ecosystem. Also validates our Fund’s belief in Product Startups, with Global Focus and Local (India) Execution”.
And a transformative event indeed it is. Facebook has made several acquisitions so far. But this is its first acquisition in India. Early-stage mergers or acquisitions have been rare in India. As a result, early investors in Indian startups could make money only if the startup did fundamentally well on its business case and traction. Continue reading
Gagan Bakshi Director – Group Strategy and M&A, InterGlobe Enterprises
Gagan Bakshi is a Director at InterGlobe Enterprises. As Head of Group Strategy, he is responsible for identifying new growth opportunities, developing InterGlobe’s diversification strategy, and providing Business Unit strategic context to the Executive Committee. As Head of M&A, he is responsible for all merger and acquisition activities across the group.
He is credited with 8 years of investment banking experience with Credit Suisse in providing M&A advisory, and Equity and Debt capital raising for clients in the energy, power, chemicals, aviation, travel and technology sectors. Prior to Credit Suisse, he has worked with leading textile companies in the US for about 6 years in various roles ranging from production management to new product development.
Mr. Bakshi holds an MBA in Finance from the University of North Carolina at Chapel Hill, North Carolina, USA, an MS degree from the University of Georgia, USA, and a B. Tech. degree from the Indian Institute of Technology, Delhi.
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