• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Vccedge deal update may'10
 

Vccedge deal update may'10

on

  • 167 views

Private equity investment in India in May 2010 grew by nearly 200% as compared to the same period last year. Deal value was $630 million in May ‘10 as against $211 million in May ’09. Total deal ...

Private equity investment in India in May 2010 grew by nearly 200% as compared to the same period last year. Deal value was $630 million in May ‘10 as against $211 million in May ’09. Total deal count also increased by 42% to 28 deals, up from 19 in May ’09.

On a month on month basis deal value in May ‘10 was substantially lower than that in Apr ‘10.

Statistics

Views

Total Views
167
Views on SlideShare
167
Embed Views
0

Actions

Likes
0
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Vccedge deal update may'10 Vccedge deal update may'10 Presentation Transcript

    • A RESEARCH PUBLICATION | May 2010 MONTHLY DEAL UPDATEMay ’10 Statistics and analysis of Private Equity, Venture Capital and Mergers & Acquisitions in India
    • Contents Page Number I. Executive Summary 1 II. Private Equity Deal Flow - Introduction 2 - Deal Breakdown 3 - Sectoral Breakdown 5 - Deal of the Month 6 - Top 5 Private Equity Deals 7 III. Private Equity Exits 8 IV. M&A Round Up - Introduction 9 - Deal Breakdown 10Corporate Office:Mosaic Media Ventures Pvt. Ltd. - Sectoral Breakdown 12B-128, First Floor, Sector 5, Noida - Deal of the Month 13Uttar Pradesh, India - 201 301Tel: +91-120-4171111 - Top 5 M&A deals 14Email Id: sales@vccedge.com COPYRIGHT © 2010 All rights reserved.
    • MONTHLY REPORTEXECUTIVE SUMMARYVCCEdge puts the Indian dealscape in context by bringing Mergers & Acquisitionsto you a set of statistics analyzing Indian M&A, privateequity and venture capital activity during May 2010.  Deal value rose to $8,596 million in May ‘10, up from $513 million in May ‘09.Private Equity  The number of domestic deals doubled from 17 in May ’09 to Total private equity investment in India went up by nearly 35 in May ’10. The value of domestic deals was $1,100 million in200% from $211 million in May ’09 to $630 million in May ‘10. May ’10 compared to $463 million in May ’09. The median deal amount and the average value of private  In terms of value, the number of outbound deals jumped manyequity deals in May ‘10 increased to $8 million and $25 fold from $50 million in May ’09 to $3,442 million in May ’10,million respectively up from $4 million and $15 million in May while in terms of volume the increase was more than 2X from 9’09. to 22. Financials, Materials & Healthcare were the most targeted The number of inbound deals increased to 7 valued at $4,039sectors for investment with deals worth $212 million, $166 million in May ’10 as against 2 deals witnessed in May ’09.million and $131 million respectively in May ‘10.  Healthcare, Financials & Materials were the most targeted There were 6 exits worth $164 million in May ’10. sectors for M&A’s with deals worth $3,740 million, $2,336 million and $1,358 million respectively in May ‘10. 1
    • PRIVATE EQUITY INTRODUCTION Private equity investment in India in May 2010 grew by nearly In the year 2010, March saw the highest deal value at $973 200% as compared to the same period last year. Deal value was million. However this could not be maintained and deal activity $630 million in May ‘10 as against $211 million in May ’09. Total recorded a dip at $840 million and $630 million in Apr ’10 and deal count also increased by 42% to 28 deals, up from 19 in May May ’10 respectively. ’09. On a month on month basis deal value in May ‘10 was substantially lower than that in Apr ‘10. Exhibit 1: Month Wise Private Equity Trend 1200 37 38 40 36 33 35 $973 1000 33 28 27 27 27 $840 30 800 23 $747 Deal Volume 25 $614 $630Deal Value ($ Mn) 19 $595 600 24 $554 20 21 $433 $455 $412 15 400 $270 $211 10 200 $167 5 0 0 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Value ($ Mn) Volume (Source: VCCEdge) 2
    • 500 PRIVATE EQUITY DEAL BREAKDOWN Exhibit 2: Private Equity Breakdown Exhibit 3: Median Deal Breakdown ($million) 30 18 16 25 24 16 23 22 14 13 20 19 12 10 8 Angel 7 8 15 8 12 12 VC 6 4 10 PE 4 6 6 6 2 5 5 4 0 2 2 1 May 05 May 06 May 07 May 08 May 09 May 10 0 0 0 0 0 May 05 May 06 May 07 May 08 May 09 May 10 (Source: VCCEdge) Exhibit 4: Average deal size in ($million) $118 Mn $315 Mn $1420 Mn $893 Mn $206 Mn $630 Mn 70 (Source: VCCEdge) 61 60 In May ’10, the total number of late stage deals stood at 22 at an 50 announced value of $598 million as against 12 deals at an 38 40 announced value of $195 million during the same period last 30 25 year. However, May ’08 saw 19 deals amounting to $882 million. 20 Venture capital deals remained at the same level over the last 20 15 10 three years. 10 0 May 05 May 06 May 07 May 08 May 09 May 10 (Source: VCCEdge) The median deal amount and the average value grew to $8 million and $25 million respectively in May ‘10. 3
    • PRIVATE EQUITYDEAL BREAKDOWNExhibit 5: Number of transactions by Deal Size Exhibit 6: Total investment by Deal Size May 10 May 10 May 09 May 09 May 08 May 08 May 07 May 07 May 06 May 06 May 05 May 05 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Undisclosed Under $ 5 mn $5 -$25 Mn Under $ 5 mn $5 -$25 Mn $25 -$50 Mn $25 -$50 Mn $50 -$ 100 Mn $100+ Mn $50 -$ 100 Mn $100+ Mn In May ‘10, Private equity deals under $50 million accounted In May ’10, Larger deals ($50 million and Above) accounted for 78 % of total deal volume . for 64 % of total capital invested. May 05 May 06 May 07 May 08 May 09 May 10 May 05 May 06 May 07 May 08 May 09 May 10Undisclosed 2 10 5 3 5 3 Under $ 5 mn 4 24 8 12 26 24Under $ 5 mn 3 7 2 7 10 10 $5 -$25 Mn 82 38 192 130 0 142$5 -$25 Mn 8 4 15 10 0 10 $25 -$50 Mn 33 145 129 136 123 64$25 -$50 Mn 1 4 4 4 3 2$50 -$ 100 Mn 0 2 0 1 1 1 $50 -$ 100 Mn 0 137 0 56 60 85$100+ Mn 0 0 3 2 0 2 $100+ Mn 0 0 1159 575 0 136 (Source: VCCEdge) (Source: VCCEdge) 4
    • PRIVATE EQUITYSECTORAL BREAKDOWNExhibit 7: Top 5 Sectors by Deal Value in May ‘ 10 ($mn) Consumer Industrials, $22 Discretionary, $62 Financials, $212 Major PE investments influencing the deal values of these sectors were investments in Avnija Properties Ltd., National Stock Exchange of India, Fortis Healthcare and Pegasus Assets Reconstruction.Health care, $131 Exhibit 9: Top 5 Sectors by Deal Volume for the month May ’10 Industrials, 4 Financials, 9 Health care, 3 Materials, $166 (Source: VCCEdge)In May ‘10, Financials, Materials & Healthcare were the mosttargeted sectors for investment with deals worth $212 million,$166 million and $131 million respectively. Together, theyaccounted for more than 80% of total private equity deal valueduring the month.Exhibit 8: Sector Summary InformationTechn Sector Volume Value($Mn) Average Size ology, 4Materials 1 166 166 Consumer (Source: VCCEdge) Discretionary, 5Industrials 4 37 12Consumer Discretionary 5 62 16Consumer Staples 1 8 8 The most active sector in terms of deal volume was theHealth care 3 131 44 Financials sector with 9 deals during the month, followed byFinancials 9 212 27 Consumer Discretionary with 5 deals. Other sectorsEnergy 0 0 0 contributing to the deal volume were Information TechnologyInformation Technology 4 13 3 and Industrials accounting for 4 deals each.Telecommunication Services 1 1 1Utilities 0 0 0 5
    • PRIVATE EQUITYDEAL OF THE MONTH Target : Avnija Properties Ltd. Announced : May 7, 2010 Buyer : Kohlberg Kravis Roberts & Co. Deal Value ($ mn): 165.6 Industry : Construction Materials Deal Feature : - (Source: VCCEdge)Kohlberg Kravis Roberts & Co. (KKR) will invest $165.6 million Since 2006, KKR has invested over $1.1 billion in India in(INR 7.5 billion) in Chennai based Avnija Properties Ltd. The technology firm Aricent; telecom infrastructure player Bharticompany will use the proceeds for both organic/inorganic Infratel and Coffee Day Resorts, operator of the Café Coffeegrowth and de-leveraging. Day chain of cafes in India.Avnija Properties Ltd., a wholly owned subsidiary of Dalmia Kohlberg Kravis Roberts & Co. is a principal investment firmCement (Bharat) Ltd., is a cement manufacturing company. specializing in equity investments in acquisitions, leveragedDalmia Cement demerged its cement business division to buyouts and management buyouts in large cap companies. TheAvnija Properties Ltd. The company manages its 9 MTPA firm considers investments in all industries.(million tonne per annum) cement manufacturing capacity.JM Financial acted as financial advisor while Simpson Thacherand AZB Partners acted as legal advisors to Kohlberg KravisRoberts & Co. Amarchand Mangaldas advised AvnijaProperties Ltd. on the deal. 6
    • PRIVATE EQUITYExhibit 10: Top Private Equity deals in May ‘10 Sno. Target Buyer Deal Value ($ mn) 1 Avnija Properties Ltd. Kohlberg Kravis Roberts & Co. 165 2 National Stock Exchange Of India Ltd. Temasek Holdings Pte. Ltd. 150 3 Fortis Healthcare Ltd. GIC Special Investments Pte Ltd. 84 4 Craftsman Automation Pvt. Ltd. International Finance Corp. 37 5 Pegasus Assets Reconstruction Pvt. Ltd. DE Shaw Composite Investments (Mauritius) Ltd. 26 (Source: VCCEdge)TOP 5 PRIVATE EQUITY DEALSThe largest deal by value was KKR’s $165 million investmentin Dalmia Cement’s unlisted subsidiary Avnija Properties Ltd.This was followed by the investment made by TemasekHoldings in National Stock Exchange of India Ltd. and GICSpecial Investments investment in Fortis Healthcare Ltd.The Top 5 deals occurred across various sectors. The top 5 PE deals accounted for 73% of the total private equity deal value in May ’10. 7
    • PRIVATE EQUITYPRIVATE EQUITY EXITSExhibit 11: Top Private Equity Exits in May ’ 10Sno. Target Seller Exit Type Deal Value ($ mn) 1 JBF Global Pte Ltd. Citi Venture Capital International Growth Fund Buyback 60 Adventity Global Services Pvt. 2 Ltd. Norwest Venture Partners, CIBC Capital Partners M&A 55 3 Mphasis Ltd. Baring India Investments Ltd. PCC Open Market 29.1 4 INX Media Pvt. Ltd. Temasek Holdings Pte. Ltd., New Vernon Private Equity Secondary Sales 12 Ltd., Kotak India Growth Fund I 5 JM Financial Ltd. Tiger Global Management LLC Open Market 8.31 (Source: VCCEdge) Secondary Sale, 1 M&A, 2 Buy Back, 1 Open Market, 2 The month of May ‘10 saw 6 exits worth $164 million. Exhibit 12: Private Equity Exits in May ’ 10 (Source: VCCEdge) 8
    • MERGERS & ACQUISITIONINTRODUCTION M&A deal value during May ‘10 stood at $8,596 million, a 16X increase over the same period last year. Deal count also witnessed an upward trend and increased by more than 124% The months ahead will offer significant deal making opportunities to to 65 deals, as compared to 29 deals witnessed during May ‘09. companies that innovate, consolidate and develop niche financing structures. There will be an increase in value and volume of Indian M&A activity as investors confidence and liquidity return to the Mar ’10 recorded the highest deal value at $14,326 million this market. year. Apr ’10 and May ’10 were substantially lower at $1,731 million and $8,596 million respectively. Exhibit 13: Month Wise M&A Trend 16,000 80 $14,326 14,000 65 70 12,000 56 70 60 53 54 52 46Deal Value ($ Mn) 10,000 50 Deal Volume 42 41 $8,596 40 8,000 35 40 33 29 6,000 30 4,000 20 $2,787 $2,867 $2,293 $1,774 $1,731 2,000 $1,160 $1,097 $1,310 10 $513 $609 $650 0 0 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Value ($ Mn) Volume (Source: VCCEdge) 9
    • 500 MERGERS & ACQUISITION DEAL BREAKDOWN Exhibit 14: M&A Breakdown Exhibit 15: Median Deal Breakdown ($ million) 40 40 Domestic Inbound Outbound 35 34 35 35 29 30 30 25 25 23 25 22 20 17 19 20 17 17 17 15 16 10 14 13 10 15 4 9 5 10 8 7 7 7 0 5 3 3 2 May 05 May 06 May 07 May 08 May 09 May 10 0 (Source: VCCEdge) May 05 May 06 May 07 May 08 May 09 May 10 Exhibit 16: Average deal size in ($million) (Source: VCCEdge) 300 277 250 The number of domestic deals increased from 17 in May ’09 to 35 in May ’10. The value increased to $1,100 million in May 200 ’10, up from $463 million in May ’09. 150 In terms of volume ,the number of outbound deals more than 92 100 69 doubled from 9 in May ’09 to 22 in May ’10. 55 51 50 33 In May ’10, the number of inbound deals increased to 7 as against 2 deals witnessed in the same period last year. 0 May 05 May 06 May 07 May 08 May 09 May 10 (Source: VCCEdge) The median deal amount increased to $34 million in May’10. Average deal value also increased to $277 million, as the top 3 deals accounted for 78% of total deal value in May ‘10. 10
    • MERGERS & ACQUISITIONDEAL BREAKDOWNExhibit 17: Number of transactions by Deal Size Exhibit 18: Total investment by Deal Size May 10 May 10 May 09 May 09 May 08 May 08 May 07 May 07 May 06 May 06 May 05 May 05 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Undisclosed Under $ 5 mn $5 -$25 Mn Under $ 5 mn $5 -$25 Mn $25 -$50 Mn $25 -$50 Mn $50 -$ 100 Mn $100+ Mn $50 -$ 100 Mn $100+ MnIn May ‘10, M&A deals under $50 million accounted for 60% of Larger deals ($50 million and above) accounted for 97% oftotal deal volume. total capital invested in May ’10. May 05 May 06 May 07 May 08 May 09 May 10 May 05 May 06 May 07 May 08 May 09 May 10undisclosed 13 16 33 23 19 34 under $5 15 10 17 21 8 17under $5 8 4 9 8 2 8 $5 - $25 m 39 141 84 121 46 101$5 - $25 m 2 13 5 7 3 7 $25 - $50 m 36 58 152 118 71 124$25 - $50 m 1 2 4 3 2 3 $50 - $ 100 m 80 75 65 78 116 308$50 - $ 100 m 1 1 1 1 2 5 $100+ 256 983 1704 1455 272 8047$100+ 1 3 3 7 1 8 (Source: VCCEdge) (Source: VCCEdge) 11
    • MERGERS & ACQUISITION SECTORAL BREAKDOWN Exhibit 19: Top 5 Sectors by Deal Value in May ‘10 ($mn) Consumer Information The major transactions influencing the deal values of these Staples, $234 Technology, $234 Health sectors were the acquisitions of Piramals Healthcare Solutions Care, $3,740 Business, KBL European Private Bankers, Anglo AmericanMaterials, $1,358 Zinc, Bank of Rajasthan and Godrej Sara Lee. Exhibit 21: Top 5 Sectors by Deal Volume for the month May ’10 Financials, $2,336 Industrials, 5 Health care, 6 Consumer Discretionary, 14 (Source: VCCEdge) In May ‘10, Healthcare, Financials & Materials were the most Financials, 6 targeted sectors with deals worth $3,740 million, $2,336 million and $1,358 million respectively. Together, they accounted for more than 86% of total deal value during the month. Exhibit 20: Sector Summary Materials, 8 Sector Volume Value($Mn) Average Size Energy 1 100 100 InformationTechnology, 16 Materials 8 1358 453 (Source: VCCEdge) Industrials 5 67 34 Consumer Discretionary 14 227 38 Consumer Staples 2 234 234 The most active sectors in terms of deal volume was Health care 6 3740 1247 Information Technology with 16 deals in the Financials 6 2336 779 month, Consumer Discretionary with 14 deals and Materials Information Technology 16 234 47 with 8 deals. Telecommunication Services 3 81 27 Utilities 4 219 219 12
    • MERGERS & ACQUISITIONDEAL OF THE MONTHTarget : Piramals Healthcare Solutions Business Announced : May 21, 2010 Buyer : Abbott Laboratories Deal Value ($ mn): 3,720Industry : Pharmaceuticals Deal Feature : Domestic (Source: VCCEdge)Abbott Laboratories entered into a definite agreement to The deal will push Abbott to the number one slot in theacquire the healthcare solutions business (domestic Indian pharma landscape with a market share offormulations) of Piramal Healthcare Ltd. for a price of $3.72 approximately 7%. The acquirer will fund the transaction withbillion (INR 173.74 billion). The buyer will make an upfront cash on the balance sheet. Piramal will continue its drugpayment of $2.12 billion and will pay $400 million annually discovery and research through Piramal Life Sciences Ltd. Forfor the next four years. The assets to be transferred includes a period of eight years, Piramal will not engage in genericthe companys manufacturing facilities at Baddi, Himachal pharmaceuticals business in India and other emergingPradesh and rights to approximately 350 brands and markets.trademarks. The division manufactures markets and sellsbranded pharmaceuticals in finished form. The domesticformulations business is currently conducted in India, Nepaland Sri Lanka. Luthra & Luthra, Baker & McKenzie advisedAbbott Laboratories and Crawford Bayley and StephensonHarwood advised Piramal Health care on the deal. 13
    • MERGERS & ACQUISITIONExhibit 22: Top M&A deals in May ‘10 Sno. Target Buyer M&A Type Deal Value ($ mn) Piramals Healthcare Solutions Business 1 (Domestic Formulations) Abbott Laboratories Inbound 3,720 2 KBL European Private Bankers SA Hinduja Group India Ltd. Outbound 1,673 3 Anglo American Zinc Hindustan Zinc Ltd. Outbound 1,338 4 Bank of Rajasthan Ltd. ICICI Bank Ltd. Domestic 659 5 Godrej Sara Lee Ltd. Godrej Consumer Products Ltd. Domestic 234 (Source: VCCEdge)TOP 5 M&A DEALSThe largest deal by value was Abbott Laboratories acquisition ofthe domestic formulations business of Piramal Healthcare Ltd.for a price of $3.72 billion . This was followed by Hinduja GroupIndia Ltd. which acquired KBL European Private Bankers SA for aprice of $1,673 million and Hindustan Zinc Ltd. which acquiredAnglo American Zinc for approximately $1,338 million .The Top 5 deals occurred across various sectors. The top 5 M&A deals accounted for 88% of the total deals activity in May ’10. 14
    • JUST LAUNCHED Public Company ComparablesVCCEdge is an online financial research platform Choose your comp set and see EV/EBITDA, EV/EBIT, EV/PAT and EV/Revenue using our proprietary compbrought to you by The VCCircle Network. tool for back of the envelope valuations. Enhanced Industry Classification Companies Screen companies and data on the basis of 10 Sectors, VCCEdge contains more than 10,000 companies 24 Industry Groups, 68 Industries and 154 Sub- searchable on various parameters including industry Industries. and geography. Private Company Financials Intelligence Now see financial data for private equity funded VCCEdge allows users to keep a close tab on deals in companies and M&A targets. Get deep insights and the market using its innovative tracking tool. deal origination ideas in hot sectors. Deals Public Company Financials VCCEdge has all mergers and acquisitions, private Key financial highlights of all Indian listed companies. equity and venture capital deals in India starting Powerful Financial Screener Directories Screen public and private companies on the basis of VCCEdge contains listings of private equity/venture Margins, Revenue, Profit or any other financial criteria. capital funds, investment banks and law firms activeFor more information: For sales enquiries:Arjun Bahl I Analyst I VCCEdge Shashank Randev I BDM I VCCEdge+91-120-4171103 I arjun@vccircle.com +91-120-4171111 I sales@vccedge.com