Tiger Global, Accel Partners, and Sofina Capital were common investors in Flipkart and Myntra. Flipkart acquired Myntra in a $350 million cash and stock deal in 2014. The acquisition provided strategic benefits like adding Myntra's apparel segment to Flipkart's electronics and books segments, and creating operational synergies through cost optimization and increased sales from cross-selling. Due diligence on the acquisition focused on profitability, integration costs and cultural fit to ensure synergies were realized. The acquisition was announced in January 2014 and closed in May 2014, with communication to customers, employees, and media emphasizing the complementary nature and strategic benefits of combining the two companies.

1. Presented By: Arpana

2. CONTENTS
Deal Summary
Valuation & Justification
Filter Criteria
Due Diligence
Communication

3. FROM A MERGER TO AN ACQUISITION
Strategic Deal - String of Pearls
Buyer Seller Relationship – Mutual Consent
Cash and Stock Deal - $350 Million Valuation
• Positioning
• Gap Filling
• Diversification
• Economies of Scale
Rational for Acquisition
• Tiger Global – US based hedge fund & private equity firm
• Accel Partners – US based venture and equity firm
• Sofina – Belgian based Private Equity firm
Common Investors

4. VALUATION & JUSTIFICATION
Price paid by the Flipkart: $350million.
Share swap process: Tiger Global Management, Accel Partners and Sofina Capital
get more shares in the merged entity.
Price to revenue multiple: 10X times the revenues.
Group No.
4
Myntra Flipkart
No. of registered users 8million 18million
No. of products on
stock
60,000 10 million books
Annualized revenues 1,200crores(approx.) 3,355crores(approx.)
Myntra attained 45% of market share in fashion lines.
The combination added 600 brands making effective sales 1.5billionUSD

5. FILTER CRITERIA
MARKET SEGMENT
FLIPKART
Electronics,
books
MYNTRA
Apparel
(>50%)
Deal was an
added vertical to
the line of business
Apparel business expected
to grow from 3 billion to 50
billion hence a prospective
sector of business
SYNERGY
Cost optimization – by
using common
resources as they have
common vendors
Operational synergy –
by increasing market
share and becoming
more dominant
Increasing sales – through
cross selling, up selling i.e.
selling apparel higher
profit margin
Flipkart merger – a growth merger for
Myntra
Launch of first online personalized style
service, more brands under private
labels and foraying into premium
designer collection

6. • Legal  Contingent Liabilities, Bs. Ownership and Rights
• Business  Profitability, Discount Structures
• Strategic  Integrations Costs, Cultural Fit
• Operational Integration of Brands, Sales & Marketing divisions
• HR  Key employees, Comp. & Benefits
DUE DILIGENCE FOCUS
• Essential factors for benefits from synergy and strategic & competitive
advantage
Reason
• No identifiable negotiation technique
• Negotiation clause – Management role
Suggested Negotiation Clause
6

7. COMMUNICATION
Dates
• Announcement – 30 January 2014
• Closing – 22 May 2014 (Prior To Signing The Deal)
• Reason For Gap – Negotiation Between The Companies
Strategy
• Optimistic Outlook Outlining The Synergies Created
• Strengthen Its Position As Largest E-commerce Platform
• Future Functioning Of The Companies
• Designation Of Myntra CEO
• Highly Complementary Nature Of Both The Companies
• Catering To Rising Demand For Online Lifestyle Products
• Brief On Both The Companies
Addressed To Its Customers, Employees And Media

8. Premium
The Premium Details
If Paid Has Not Been
Disclosed
Synergy
Cost Based &
Revenue Based
Integration
Strategy – Change
Management – Change
Entity – Change
Integration Has Been
Successful
Myntra Has Been Able To
Launch New And Better
Products But The Bottom Line
Result Is Too Early To Be
Judged Upon
INTEGRATION

9. THANK YOU