M&A Magazine

Mergers are supposed to make companies more productive. They’re meant to get rid of inefficiencies, grow revenues and result in a stronger bottom line. But sometimes things don’t go according to plan. The new team won’t buy in, middle managers are unhappy with their pay, and the acquired company isn’t reaching its projected growth. What happened? In numerous studies, researchers have found that somewhere between 50-80% of   Mergers Fail To Create Value for shareholders. While some people believe the major issue is dealmakers who get caught up in trying to close deals at any cost, we believe that failure is more often the result of bungled attempts to merge the companies after the papers are signed. AxialMarket Member until they were recently acquired by Badger Meter, spoke with us about his successful acquisitions and how he avoided three major issues common in most acquisitions. 1) Conflicting HR Policies and Pay Structures: A huge issue in mos...

Shareholders are the owners of the corporations. Shareholders have the right to access and examine the corporate records and information concerning the governance and financial performance of the corporate. With the changing time, shareholders are increasing their active engagement in the corporations. Participation of the shareholders has increased with the e-voting implication under the Companies Act, 2013 (Act), it has made easier to raise their opinions on the critical corporate matters. In a recent blow, there have been instances where the shareholders have got down on the resolutions put before them. The majority being resolutions empowering the Board and appointments in the same, related Party transactions (RPT’s), amendments in the Articles and or Memorandum of the company. As on the date, 66 resolutions have been defeated by the shareholders since January, 2014. Minority-Shareholders-Activism-Resolutions-1 What made it possible? Primary reasons Law protecting ...

UFO Moviez India Limited (UFO) is a public limited company incorporated on June 14, 2004. It is India’s largest digital cinema distribution network and in-cinema advertising platform in terms of number of screens. UFO operates India’s largest satellite-based, digital cinema distribution network using its UFO-M4 platform, as well as India’s largest D-Cinema network. Their offerings include Digital Cinema System, UFO Framez, Club Cinema and IMPACT Ticketing Platform. UFO Moviez is currently having a market cap of Rs 1,456 Crores on BSE. Qube Cinema Technologies Private Limited (QCTPL) is a company incorporated on 1 st January 1986. It is engaged in the business of providing technology in film, video and audio, including digital cinema distribution, editing, production and sound. Other companies involved in the scheme are: Company Business of the company Qube Digital Cinema Pvt Ltd (QDCPL), incorporated on 11 th October 2017. Providing technology in film, video and audio, incl...

Tata Communications Ltd (formerly known as Videsh Sanchar Nigam Limited) is a $2.9 billion company listed on the Bombay Stock Exchange and the National Stock Exchange of India and is the flagship telecom arm of the $103.3-billion Tata Group. Hemisphere Properties India Ltd (HPIL) is a public company in which 51.12% is held by Government of India (GOI) and balance share is held by Panatone Finvest Limited (a Tata group company). Presently, shares of the company are not listed on any stock exchange and the company do not have any revenue from operations. Transaction In 2002, GOI carried out disinvestment exercise of 25% of its equity holding in the Tata Communications (erstwhile VSNL) and terms of the bid required that bidder will take into account value of land which would remain with the VSNL and exclude surplus lands of approx. 740 acres excluding 95 acres which is in control of defence ministry. Panatone Finvest Limited (PFL) was successful bidder in this process. Subsequ...

The year 2017 will be known as the year of initial public offerings as record number of companies went for equity issuance. As many as 153 companies raised Rs 75,859 crore in the calendar year 2017, the largest in a single year in the history of Indian capital markets. In fact, the mop-up in 2017 is even larger than Rs 56,896 crore that companies raised from the primary markets between 2011 and 2016 cumulatively. A report by EY says India’s BSE, NSE and junior markets recorded a 74% increase in deal numbers in 2017 compared with 2016. Spurt in listing The three sectors by highest number of IPOs were insurance, non-banking financial companies and construction.  The IPO market in the country scaled new heights in 2017 as retail and institutional investors look for productive avenues to invest in a market with a shrinking interest rate, low bond yields, capped gold investments and real estate investments under scrutiny. The key indices – S&P BSE Sensex and NSE Nifty 50 deliv...

In the Indian e-start-up business space, Quikr has become everyone's envy. The pace at which it is acquiring companies to grow and diversify is remarkable. Since January last year, it has acquired around 8 companies, and the latest, it is buying two arms of HDFC's brokerage business – HDFC Realty and the digital business HDFC Red in an all-stock deal. It is estimated that the deal would be pegged around Rs 400 crore. In return, HDFC Ltd, the housing finance arm of HDFC Bank, will pick up 5% stake in Quikr, a leading online cross-category classifieds platform. The valuation of Quikr, one of a handful of homegrown unicorns (start-ups worth $1 billion), is pegged at around $1.5 billion, or around Rs 10,000 crore. The acquisition of these two arms of HDFC Ltd will help Quikr to scale up its business as it strives to get into potential business areas like real estate, automobiles, jobs and other customer-related services. The acquisition will also help Quikr to generate l...

Arvind L imited is engaged in the business textiles, fashions, engineering business and other business. The company is a leading fabric and apparel supplier to world’s top brands and a prominent technical textiles player. Arvind Fashions Limited (AFL ) is a leading branded apparel and accessory platform. Branded apparels (comprising 30-40 percent of the total consolidated revenue) reported an impressive set of numbers in terms of turnover and operational efficiency. Engineering business has shown impressive revenue growth, is debt free and has good EBITDA margin in all segments of the company TRANSACTION Arvind Ltd has decided to demerge and publicly list its branded apparel and engineering businesses to focus more on its core textiles business.  Demerger of the branded apparel and engineering arms of the company, thereby creating two new listed companies by the name of Arvind Fashions and Anup Engineering, respectively. Currently, branded business is carried out as a di...