dealtracker - business opportunities in india: investment · pdf file ·...

Dealtracker Providing M&A and Private Equity Deal Insights

First Quarter, 2015

Volume 11.3

© 2015 Grant Thornton India LLP. All rights reserved.

Disclaimer

This document captures the list of deals announced based on information available in the public domain

and based on public announcements. Grant Thornton India LLP does not take any responsibility for the

information, any errors or any decision by the reader based on this information .This document should not

be relied upon as a substitute for detailed advise and hence, we do not accept responsibility for any loss as

a result of relying on the material contained herein. Further, our analysis of the deal values are based on

publicly available information and based on appropriate assumptions (wherever necessary). Hence, if

different assumptions were to be applied, the outcomes and results would be different.

Dealtracker editorial team:

Monica Kothari, Sowmya Ravikumar

https://play.google.com/store/apps/details?id=com.dealtracker

https://itunes.apple.com/us/app/dealtracker/id859956400?ls=1&mt=8


Foreword

We are pleased to present Grant Thornton Dealtracker Report for first quarter of 2015 (January –

March). As we enter into the 11th year of publishing this document, I want to thank the readers

for their continued support and feedback.

We ended the year 2014 on a high note, with a the new government at the Centre promising to

be business friendly, renewing the optimism among business leaders. This was reflected in a

significant pickup in deal momentum, post the Lok Sabha elections. We continue to see this

momentum building up further in 2015.

Overall, the first quarter witnessed deals worth US$ 8.2 billion (350 deals), as against US$ 6.4

billion (257 deals) in 2014 and US$ 6.5 billion (220 deals) in 2013, which shows a significant surge

both in terms of values and volumes. We continued to see active inbound interest in Indian

businesses and consolidation among domestic businesses. The e-commerce sector is showing

significant activity and seems to be on 'steroids' in terms of deal-making, investments and

innovation.

In its maiden full-year Union Budget presented in February, the government renewed its

commitment on fiscal consolidation and set out its goal to boost economic growth and increase

infrastructure spending. The Budget also emphasised on the importance of manufacturing in

India. Going forward, we can hope to see more investments for manufacturing in core sectors.

The Technology and Pharma sectors has always significant action in terms of deal making and

this is expected to continue. We are geared up for an active year in deal-making and look forward

to take our readers through this exciting journey in the months to come.

Harish HV

Partner

Grant Thornton India LLP


Overall deal activity in the first quarter of 2015 (Q1-2015) stood at US$ 8.2 billion (350 deals),

up 36% in terms of volume and 27% in terms of value over first quarter of 2014 (Q1-2014).

M&A values increased by 26% mainly due to strong inbound interest and an active domestic

market where large players are looking at consolidation to establish leadership position in select

markets.

PE investment in Q1-2015 witnessed 30% increase in deal value and 67% increase in deal

volume against Q1-2014 with four deals worth over US$ 100million each and over eight deals

worth over US$ 50million each in the quarter. PE volumes have steadily been increasing and

now contribute more than 50% to overall deal volumes, thus surpassing M&A.

There were 40 PE exits during the quarter, and we expect many more in the months to come as

PEs have remained invested for a considerable time in most investments in the country and are

eagerly awaiting exits through trade sales and consolidation in key sectors.

The IT&ITeS and Pharma/Healthcare sectors dominated both M&A and PE deal activity. E-

commerce continued to garner multi million dollar investments coupled with big ticket

consolidations amongst players. In Pharma, we saw Mylan picking up select businesses of Famy

Care for US$ 750million putting the spotlight on India's generics segment.

Notable strategic deals during the quarter were Harman International Industries-Symphony

Teleca Corporation (US$ 780million), Alibaba Group- One97 Communications Ltd (US$ 575

million) and key PE investments during the quarter were TPG Capital's investment into Manipal

Health Enterprises (US$ 150million), and Equis Funds Group's investment in Assetz Property

(US$116million).

Given the strong Q1 activity and a positive macro-economic environment, we expect an exciting

year of deals and more importantly, a healthier and encouraging corporate environment.

Prashant Mehra

Partner

Grant Thornton India LLP

Foreword


Deal Round Up Q1-2015

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2013 2014 2015

Private Equity

Outbound

Inbound

Internalrestructuring

Domestic

Deal Summary Volume Value (US$ mn)

Year 2015 2014 2013 2015 2014 2013

Domestic 65 50 66 1,478 853 1,344

Cross Border 64 67 51 4,113 2,479 3,810

Mergers and Internal Restructuring 2 9 13 11 1,107 60

Total M&A 131 126 130 5,602 4,439 5,214

PE 219 131 90 2,610 2,004 1,301

Grand Total 350 257 220 8,212 6,443 6,515

Cross Border includes

Inbound 29 43 30 3,544 1,987 2,957

Outbound 35 24 21 569 492 853

0

50

100

150

200

250

300

350

400

2013 2014 2015

Total Deal Volume Spread – Q1 '15 Total Deal Value Spread (US$ mn) – Q1'15

• In Q1 - 2015, the overall deal activity stood at US$ 8.2bn (350

deals) against US$ 6.4bn (257 deals) in corresponding period of

2014 and US$ 6.5bn (220 deals) in Q1-2013.

• PE investment in Q1-2015 grew 30% in deal value and 67% in

deal volume over Q1-2014 with four deals worth over US$

100mn each and over eight deals worth over US$ 50mn each in

the quarter.

• The overall M&A values increased by 26% over Q1-2014 when

the deal momentum was at an all time low due to economic

uncertainties.

• The quarter saw QIPs worth US$ 944mn and IPOs worth US$

118mn.

PE volumes have steadily been increasing and

now contribute more than 50% to the overall

deal volumes, surpassing M&A.

In values, inbound investments were the key

drivers with several big ticket deals, followed by

PE.


Deal Round Up - March 2015

0

500

1000

1500

2000

2500

2013 2014 2015

Private Equity

Outbound

Inbound

Internal restructuring

Domestic

Deal Summary Volume Value (US$ mn)

Year 2015 2014 2013 2015 2014 2013

Domestic 24 21 23 506 423 256

Cross Border 18 19 19 160 301 1,494

Mergers and Internal Restructuring 1 3 2 10 1,050 10

Total M&A 43 43 44 676 1,774 1,760

PE 76 46 27 700 535 589

Grand Total 119 89 71 1,376 2,309 2,349

Cross Border includes

Inbound 7 11 10 109 206 788

Outbound 11 8 9 51 95 706

0

20

40

60

80

100

120

140

2013 2014 2015

Total Deal Value Spread (US$ mn) – Mar'15 Total Deal Volume Spread – Mar '15

• M&A values in March 2015 were 62% lower than those seen in

March 2014 while volumes remained stable. This was largely due

to the internal restructuring deal of GlaxoSmithKline (US$ 1,032

million) consolidating stake in Indian arm in March 2014.

• PE investment continues to show an upward trend in volume and

value month after month.


Deal of the Quarter

Infotainment company

HARMAN International

Industries has agreed to

acquire Symphony Teleca

for US$ 780 million

TPG Capital picks 24.75%

in Manipal Health for US$

150 million

Acq

uir

er

Targ

et

Rati

on

ale

In

vesto

r In

veste

e

Ratio

nale

HARMAN designs,

manufactures and markets

premier audio, visual,

infotainment and enterprise

automation solutions for the

automotive, consumer and

professional markets.

Symphony Teleca, part of the

US$ 2.5 billion Symphony

Technology Group provides

outsourced product development as

well as data analytics and mobility

services to enterprises.

With the acquisition of Symphony Teleca,

HARMAN will add a fourth division to its

three primary businesses: Infotainment,

Lifestyle and Professional to develop and

commercialise more innovative solutions

and systems for a broader set of industries.

TPG Capital is one of the

largest private equity

investment firms globally,

focused on leveraged buyout,

growth capital and leveraged

recapitalization investments in

distressed companies and

turnaround situations.

Manipal Health

Enterprises Ltd, the

healthcare arm of Manipal

Group is one of the largest

healthcare chains in India

with a network of over 15

hospitals and three primary

clinics spread across 6 states.

The funding is expected to fuel

the hospital's expansion plans

and also benefit from TPG's

operational know-how and

international experience

M&A PE


Top M&A Deals in the Quarter

Acquirer Target Sector US$ mn Deal Type % Stake

Harman International Industries Symphony Teleca Corporation IT & ITES 780 Acquisition 100%

Mylan Inc Famy Care Ltd (women’s health

care business)

Pharma, Healthcare &

Biotech 750 Acquisition 100%

Alibaba Group One97 Communications Ltd IT & ITES 575 Minority Stake 29%

Undisclosed Bharti Airtel Ltd Telecom 310 Minority Stake 3%

Silver Eagle Acquisition Corp Videocon D2H Media and Entertainment 300 Strategic

Acquisition 34%

Infosys Technologies Ltd Panaya Inc IT & ITES 200 Acquisition 100%

ANI Technologies Pvt Ltd-

Olacabs.com

Serendipity Infolabs Pvt Ltd-

TaxiForSure IT & ITES 200 Acquisition 100%

Sembcorp Industries Ltd Green Infra Ltd Energy & Natural

Resources 169 Majority Stake 60%

Balasore Alloys Ltd- Ispat Group Rohit Ferro-Tech Ltd Manufacturing 165 Acquisition 100%

Reliance Infrastructure Ltd Pipavav Defence & Offshore

Engineering Co Ltd

Infrastructure

Management 132 Minority Stake 18%

M&A Round Up Q1-2015


IT & ITES 37%


Biotech 18%

Media & Entertainment

13%

Telecom 5%

Retail & Consumer

5%

Manufacturing 5%

Infrastructure Management

4% Others 13%

Q1-15 sector breakup by value US$

IT & ITES 31%


Biotech 14% Manufacturing

9%


8%

Retail & Consumer

8%

Automotive 5%

Banking & Financial Services

5%

Professional / Business Services

5%

Others 15%

Q1-15 sector breakup by Volume

Sector Spotlight M&A – Q1-2015

Notable sector trend

• This quarter saw the fourth-largest in-bound M&A (Mylan – Famy Care

businesses for US$ 750mn) in the pharma sector ever, which comes just

over a year after Mylan executed an even larger deal to buy Agila from

Strides Arcolab for US$ 1.65 billion. This highlights India's strong position

in the global generics market.

• The IT&ITES sector continues to be a major attraction in the M&A space

contributing 37% of the deal values.

Deal Volume Deal Value (US$ mn)

Sectors Q1 2015 Q1 2014 Q1 2013 Q1 2015 Q1 2014 Q1 2013

IT & ITES 41 22 22 2,059 328 281


Biotech 19 13 8 1,025 1,172 1,889

Media &

Entertainment 11 11 10 739 206 122

Telecom 1 - 3 310 - 15

Retail & Consumer 10 13 10 273 688 153

Manufacturing 12 17 20 255 246 275


PE Round Up - Q1 - 2015

Top PE Deals in the Quarter

Investor Investee Sector % Stake US$ mn

TPG Capital Manipal Health Enterprises Private

Limited. Pharma, Healthcare & Biotech 25% 150

Equis Funds Group Assetz Property Real Estate N.A. 116

Rocket Internet AG and other investors Foodpanda IT & ITES N.A. 110

Tiger Global, Helion Venture Partners and

Nexus Venture Partners. Clues Network Pvt Ltd-ShopClues IT & ITES N.A. 100

CDC Group, CX Partners, Bajaj Group Ujjivan Financials services Banking & Financial Services N.A. 97

IDFC -India Infrastructure Fund II DB Power Limited- (Diliigent Power ) Energy & Natural Resources 15% 81

Tybourne Capital, Valiant Capital Sequoia

Capital, Sofina and ru-Net

Accelyst Solutions Pvt Ltd-

Freecharge.in IT & ITES N.A. 80

KKR, India Value Fund Advisors (IVFA) and

LeapFrog Investments Magma Fincorp Ltd Banking & Financial Services N.A. 80

SAIF partners One97 Communications Ltd IT & ITES 3% 60

Temasek and Norwest Venture Partners Manthan Software Services Pvt Ltd IT & ITES N.A. 60


IT & ITES 43%


Biotech 14%

Real Estate 13%


13%

Energy & Natural

Resources 4%

Retail & Consumer

3% Others 10%

Q1-15 sector breakup by value US$

Sector Spotlight PE -Q1-2015

Notable sector trend

• With the online advertising spend in the real estate industry set to reach

touch nearly US$ 16 bn, as per industry sources, the online realty portals

are seeing increasing investor interest.

• In the IT&ITES sector, e-commerce in particular continues to witness

heightened PE activity

• Recently, the government allowed 100% FDI under automatic route in the

medical devices sector to encourage manufacturing of equipment,

including diagnostic kits and other devices. This could result in investment

in companies with niche technology.

Deal Volume Deal Value (US$ mn)

Sectors Q1 2015 Q1 2014 Q1 2013 Q1 2015 Q1 2014 Q1 2013

IT & ITES 126 57 27 1,119 740 106


Biotech 15 10 18 370 74 290

Real Estate 14 4 6 349 49 165

Banking & Financial

Services 12 8 12 340 68 165

Retail & Consumer 14 12 5 86 193 98

Media & Entertainment 10 7 4 61 61 19

IT & ITES 58%


Biotech 7%

Real Estate 6%

Retail & Consumer

6%


5%


5%

Others 13%

Q1 - 15 sector breakup by Volume


40,000 people in over

130 countries

Combined

global revenues US$4.7bn (2014)

over

700 offices

The fastest

growing

large accounting organisation in 2012 and 2013

Member firm within

Grant Thornton

International Over

2,000 people

one of the largest

fully integrated

Assurance,

Tax & Advisory

firms in India

13 offices

Ranked among

top 5 in all major markets

including India

Presence in 12 major cities of India –

National office: Delhi, Ahmedabad, Bengaluru, Chandigarh, Chennai, Gurgaon, Hyderabad, Kochi, Kolkata, Mumbai, Noida and Pune

About us


In an era where investors and other stakeholders

demand transparent financial reporting, we provide

our clients with a

robust audit, and accounting advisory expertise in

the following areas:

• Attest Services

• Financial Reporting Advisory Services

ASSURANCE

ADVISORY

• Corporate Finance

• Forensic & Investigation

• Governance, Risk & Operations

• Specialist Advisory

We work with businesses and their owners to develop bespoke tax compliance &

planning strategies best suited to their specific business needs

in the following areas:

• Direct Tax

• Compliance & Outsourcing

• Indirect Tax

• Transfer Pricing

• US Tax

TAX

We work with businesses from the initial concept stage, assessing the feasibility of their business plan right through to developing and supporting

the growth to exit strategy. Our advisory services include:

Supporting your growth


We pride ourselves on our passion for serving our clients and our people and we are being recognised as a result. Grant Thornton has

been conferred with a number of awards and accolades including the following:

Other member Firms

India Transfer Pricing Firm of the

Year 2013

Healthcare Deal of the Year

2012 Best Transfer Pricing Team - 2010

India

Accounting and Transaction Advisor

of the year – 2011,2012

& 2013

Asia Pacific venture capital deal of the

year - 2010

Top Global Social Infrastructure PPP &

Financial Advisor

India Firm

Best Tax Team in a National Firm

Financial Services LexisNexis Awards

2013

Corporate Finance Advisor of the Year

ACQ Global Awards 2012

Awards & accolades

Contact us To know more about Grant Thornton in India, please visit www.grantthornton.in or contact any of our offices as mentioned

below:

NEW DELHI National Office Outer Circle L 41 Connaught Circus New Delhi 110 001 T +91 11 4278 7070

AHMEDABAD BSQUARE Managed Offices, 7th Floor, Shree Krishna Center, Nr. Mithakali Six Roads, Navrangpura, Ahmedabad 380009 T +91 7600001620

BENGALURU “Wings”, 1st floor 16/1 Cambridge Road Ulsoor Bengaluru 560 008 T +91 80 4243 0700

CHANDIGARH B-406A, 4th Floor L&T Elante Office Building Industrial Area Phase-I Chandigarh – 160002 T +91 172 4338 000

CHENNAI Arihant Nitco Park, 6th floor No.90, Dr. Radhakrishnan Salai Mylapore Chennai 600 004 T +91 44 4294 0000

GURGAON 21st floor, DLF Square Jacaranda Marg DLF Phase II Gurgaon 122 002 T +91 124 462 8000

HYDERABAD 7th floor, Block III White House Kundan Bagh, Begumpet Hyderabad 500 016 T +91 40 6630 8200

KOCHI

7th Floor, Modayil Centre point,

Warriam road junction,

M.G.Road,

Kochi 682 016

T +91 484 40064541

KOLKATA

10C Hungerford Street

5th floor

Kolkata 700 017

T +91 33 4050 8000

MUMBAI

16th floor, Tower II

Indiabulls Finance Centre

SB Marg, Elphinstone (W)

Mumbai 400 013

T +91 22 6626 2600

MUMBAI

9th Floor, Classic Pentagon,

Nr Bisleri factory, Western

Express Highway, Andheri (E)

Mumbai 400 099

T +91 22 6176 7800

NOIDA

Plot No. 19A, 7th Floor

Sector – 16A,

Noida – 201301

T +91 120 7109001

PUNE 401 Century Arcade Narangi Baug Road Off Boat Club Road Pune 411 001 T +91 20 4105 7000


Grant Thornton India LLP (formerly Grant Thornton India) is registered with limited liability with identity number AAA-7677 and its registered office at L-41 Connaught Circus, New Delhi, 110001

“Grant Thornton in India” means Grant Thornton India LLP, a member firm within Grant Thornton International Ltd (‘Grant Thornton International’)., and those legal entities which are its related parties as defined by the

Companies Act, 2013 read in conjunction with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India. Grant Thornton International and the member firms are not a worldwide

partnership. Services are delivered by the member firms independently.

For more information or for any queries, write to us at [email protected]

Follow us @GrantThorntonIN

http://www.grantthornton.in/

https://twitter.com/GrantThorntonIN

dealtracker - business opportunities in india: investment · pdf file ·...

Documents