© Grant Thornton India LLP. All rights reserved.
DealTracker
Third Quarter, 2014
Dealtracker Providing M&A and Private Equity Deal Insight
Volume 10.9
© Grant Thornton India LLP. All rights reserved.
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Foreword
3
Raja Lahiri
Partner
Grant Thornton India LLP
We are pleased to present Grant Thornton Dealtracker Report for 3rd Quarter of
2014 (July – September, 2014) which captures deal data (value/volumes) along
with related analysis.
There has been clear upswing in the M&A and PE deal activity with US$36bn
worth of deals in the nine month period ending September 2014, the best we
have seen since 2012. It is noteworthy to mention here that we have seen an
increase across segments from domestic, inbound, outbound to Private Equity in
both values and volumes. This clearly implies a revival in business sentiments and
investment climate.
While the year began on a rather cautionary note, the deal pace started picking up
in the months closer to the Elections and the momentum kept increasing
thereafter, signalling positive vibes for the months and quarters to come.
Clear deal drivers have been the domestic and inbound space with 70% higher
inbound values and more than twice the domestic deal values seen in 2013.
Moreover, with close to a 40% increase in investment volumes over 2013, private
equity deals have contributed 50% of total deal volumes in 2014 driven by the
technology sector.
In terms of sectors, we have seen M&A values driven by the Pharma sector
with deals such as Sun- Ranbaxy merger indicating the consolidation trend
in the sector, and GlaxoSmithKline consolidating operations by hiking the
stake in Indian subsidiary. Technology sector has been active both in M&A
and PE. Key deals include Cognizant acquiring US based Trizetto for
US$2.7 bn, Flipkart-Myntra acquisition for US $ 340mn. PE investment
continues to be driven by the e-commerce sector led by the billion dollar
investment into Flipkart.
Sectors which are expected to see renewed deal activity include
infrastructure, energy, consumer and financial services. We expect
valuations to go up given the renewed business sentiments which in our
view, would be both a challenge and an opportunity for dealmakers to close
deals in the coming quarters.
We believe that this momentum of deal activity will continue to increase
and we look forward to closing the year on a high note.
Happy Dealmaking!
© Grant Thornton India LLP. All rights reserved. 4
Dealscape
YTD 2014 Highlights
Quarter 3, 2014 Deal Round-up
Deals of the Quarter
© Grant Thornton India LLP. All rights reserved.
Total Deal Volume Spread – YTD'14 Total Deal Value Spread (USD bn) – YTD'14
• In YTD 2014, the overall deal activity stood at USD 36.2bn (886 deals),
significantly higher than the USD 29.7bn (694 deals) in 2013 and also
surpassing 2012 levels.
• PE investment so far in 2014 is higher at USD 8.4bn against USD 7.8bn in
2013, with 38% higher volumes in 2014 compared to 2013.
• The M&A space has rebound in YTD 2014 as compared to the previous
year, with 70% higher inbound values and more than twice the domestic
deal values seen in 2013.
Deal Summary- YTD Volume Value (USD mn)
2012 2013 2014 2012 2013 2014
Domestic 177 166 194 4,431 4,319 9,717
Crossborder 180 168 214 9,124 13,385 14,787
Merger & Internal
Restructuring 79 38 33 14,614 4,264 3,313
Total M&A 436 372 441 28,168 21,969 27,817
Private Equity 311 322 445 6,052 7,806 8,454
Grand Total 747 694 886 34,220 29,775 36,271
Cross border includes
Inbound 100 103 129 3,669 5,685 9,698
Outbound 80 65 85 5,455 7,700 5,089
Trend spotting
Deal Round Up YTD 2014
5
There is a continuous uptick in PE deal
values and volumes, with over 50% deal
volume from PE/VC investments
alone.
M&A has rebound in 2014 driven by
domestic and inbound deals both in
values and volumes
165 151 160
95 86 116
75 61
72
75
30
25
2012 2013 2014
Merger & InternalRestructuring
Outbound
Inbound
Domestic
Private Equity
177 166 195
100 103 129
80 65 85
79
38
32
2012 2013 2014
4.4 4.3 9.7
3.7
5.7
9.7 5.5
7.7
5.1 14.6
4.3
3.3
2012 2013 2014
311 322
445
6.1
7.8 8.5
© Grant Thornton India LLP. All rights reserved. 6
Deal Round Up YTD 2014
Mergers & Acquisitions
Private Equity
Deal Volume Deal Value (USD mn)
Sectors YTD 2012 YTD 2013 YTD 2014 YTD 2012 YTD 2013 YTD 2014
IT & ITES 98 105 179 1870 1410 3105
Infrastructure Management 10 9 14 352 165 1127
Banking & Financial Services 36 32 33 537 901 896
Real Estate 18 23 29 469 686 695
Pharma, Healthcare & Biotech 32 49 42 787 660 664
Retail & Consumer 27 30 33 496 427 503
Top Sectors based on Deal Value
Top Sectors based on Deal Value
Deal Volume Deal Value (USD mn)
Sectors YTD 2012 YTD 2013 YTD 2014 YTD 2012 YTD 2013 YTD 2014
Pharma, Healthcare &
Biotech 27 29 48 1835 2621 5387
IT & ITES 79 68 94 2706 890 5059
Retail & Consumer 34 26 32 1133 3454 3490
Telecom 9 7 10 1070 607 3297
Energy & Natural
Resources 39 29 30 14245 6439 2547
Real Estate 15 20 20 799 831 1695
Pharma, Healthcare &
Biotech 19%
IT & ITES 18%
Retail & Consumer
13% Telecom
12%
Energy & Natural Resources
9%
Real Estate 6%
Manufacturing 5%
Media & Entertainment
4%
Others 14%
YTD 2014
IT & ITES 36%
Infrastructure Management
13%
Banking & Financial Services
10%
Real Estate
8%
Pharma, Healthcare & Biotech
8%
Retail & Consumer 6%
Energy & Natural Resources
4%
Manufacturing 3%
Transport & Logistics
2%
Media & Entertainment
2%
others 8%
© Grant Thornton India LLP. All rights reserved.
Total Deal Volume Spread – Q3'14 Total Deal Value Spread (USD mn) – Q3'14
• Q3 2014 has been the best quarter in the last 3 years with an increase in
volumes and values across domestic, cross-border and PE.
• Inbound activity in Q3'14 saw 8 deals valued at over a USD 100mn each, led
by the USD1.9bn stake purchase of Diageo in United Spirits
• Private equity witnessed a 47% increase in values led by the billion dollar
investment in Flipkart and 37% increase in volumes driven by the IT&ITES
sector with over 40% share in total deal volumes.
Deal Summary – Q3 Volume Value (USD mn)
2012 2013 2014 2012 2013 2014
Domestic 46 51 78 1,288
1,309
2,095
Crossborder 56 55 81 4,011
4,922
8,393
Merger & Internal
Restructuring 11 13 11 75
3,765
56
Total M&A 113 119 170 5,373
9,996
10,544
Private Equity 92 115 157 2,254
2,126
3,121
Grand Total 205 234 327 7,628
12,121
13,665
Cross border includes
Inbound 24 38 41 696
1,590
4,870
Outbound 32 17 40 3,315
3,331
3,523
Trend spotting
Deal Round Up Q3 2014
7
Private Equity
165 151 160
95 86 116
75 61
72
75
30
25
2012 2013 2014
Merger & InternalRestructuring
Outbound
Inbound
Domestic
2,254 2,126
3,471
92 115
159 PE: Several big ticket deals in Q3'14.
15 investments over USD 50 mn each
including two over USD 100mn and
one billion dollar investment. Q3'2013
had only 9 investments worth over USD
50mn each.
M&A activity saw increase across all
segments, with inbound driving values
and domestic driving volumes
1,288 1,309 2,095 696
1,590
4,870 3,315
3,331
3,523
75
3,765
56
2012 2013 2014
46 51
78
24
38 41 32
17
40 11 13
11
2012 2013 2014
© Grant Thornton India LLP. All rights reserved. 8
Sector Round-up Q3 2014
IT & ITES 26%
Manufacturing 13%
Pharma, Healthcare &
Biotech 12%
Media & Entertainment
9%
Energy & Natural Resources
6%
Infrastructure Management
5%
Banking & Financial Services
5%
Retail & Consumer
5%
Others 19%
M&A Q3 2014 By Volume
IT & ITES 36%
Retail & Consumer
19% Energy & Natural
Resources 10%
Telecom 10%
Manufacturing 8%
Pharma, Healthcare &
Biotech 6%
Banking & Financial Services
2%
Media & Entertainment
2%
Others 7%
M&A Q3 2014 By Value
IT & ITES 42%
Pharma, Healthcare &
Biotech 11% Real Estate
6%
Retail & Consumer
6%
Banking & Financial Services
6%
Energy & Natural Resources
5%
Education 4%
Media & Entertainment
4%
Others 16%
PE Q3 2014 - By volume
IT & ITES 51%
Infrastructure Management
9%
Real Estate 9%
Energy & Natural Resources
7%
Retail & Consumer
6%
Banking & Financial Services
5%
Pharma, Healthcare &
Biotech 4%
Media & Entertainment
3%
Others 6%
PE Q3 2014 By Value
© Grant Thornton India LLP. All rights reserved. 9
Deals of the Quarter
M&A
PE
US$ 2.7
bn
ACQUIRER
TARGET
RATIONALE
Cognizant Technology Solutions
acquired US based TriZetto Corp
from PE firm Apax Partners LLP and
other minority shareholders.
US$ 1
bn
Flipkart raised USD 1bn in a fresh
round of funding, led by existing
investors along with other new
investors
INVESTOR
INVESTEE
COMMENTS
Existing investors– Tiger Global, Naspers,
DST Global, ICONIQ, Accel Partners &
Sofina. New investors - Singapore based
sovereign wealth fund – GIC & Morgan
Stanley Investment Management.
Flipkart is India’s largest e-commerce
company. This is its second fundraise in the
current year, taking its total funds raised to
over USD 1.7 bn since inception.
With the third largest PE fundraise of all time
in India, Flipkart plans to strengthen its
technology and acquire firms across areas like
e-commerce, technology and supply chain and
exploit the massive market opportunity in the
e-commerce sector.
Cognizant is a leading provider of
information technology, consulting, and
business process outsourcing services.
TriZetto Corporation is a US based
healthcare IT and software solutions
provider that helps payers and
providers work more efficiently and
collaborate to deliver better healthcare
services
This is a strategic acquisition
for Cognizant as it gives the company
the ability to work better with its
healthcare clients. It's the biggest
acquisition in the Indian IT space
© Grant Thornton India LLP. All rights reserved. 10
M&A Round-up Q3 2014
Top M&A Deals of the Quarter
Acquirer Target Sector US $ Mn Deal Type % Stake
Cognizant Technology Solutions TriZetto Corp IT & ITES
2,700 Acquisition 100%
Diageo Plc United Spirits Ltd Retail & Consumer
1,903
Increasing Stake to
54.78% 26%
Teleperformance Aegis Limited USA Inc - Aegis Group IT & ITES
610 Acquisition 100%
Huhtamaki Oyj Positive Packaging Industries Limited Manufacturing
336 Acquisition 100%
Adani Power Ltd Lanco Infratech 1,200 MW plant Energy & Natural Resources
333 Acquisition 100%
TCG Group Haldia Petrochemical Limited Energy & Natural Resources
220 Strategic Stake 40%
Solargise Grapp Energies & subsidiary Green
Ripples Energy & Natural Resources
200 Majority Stake N.A.
Strides Arcolab Shasun Pharma Pharma, Healthcare & Biotech
200 Merger N.A.
Wipro Ltd ATCO- IT Services division IT & ITES
195 Acquisition 100%
JSW Steel Limited Welspun Maxsteel Limited Manufacturing
164 Acquisition 100%
© Grant Thornton India LLP. All rights reserved. 11
PE Round-up Q3 2014
Top PE Deals of the Quarter
Investor Investee Sector US$ Mn % Stake
Morgan Stanley Investment Management, GIC, Accel
Partners, DST Global, Iconiq Capital and Sofina Flipkart Online Services Pvt Ltd IT & ITES 1,000 N.A.
KKR (through structured financing) GMR Holdings Pvt. Ltd Infrastructure Management 164 N.A.
Goldman Sachs, Asian Development Bank and South
Asia Clean Energy Fund ReNew Power Private Limited Energy & Natural Resources 140 N.A.
Apax Partners Cholamandalam Investment & Finance
Company Limited Banking & Financial Services 83 8%
Standard Chartered Private Equity Advisory (India)
Private Limited Sterlite Power Grid Ventures Limited Infrastructure Management 83 N.A.
Tata Capital Shriram Properties Private Limited Real Estate 80 18%
Peninsula Brookfield Investment Managers Ansal Properties and Infrastructure Limited Real Estate 66 N.A.
Tiger Global and Bharti Softbank Holdings Pte. Ltd. Hike Technologies Private Limited IT & ITES 65 N.A.
Xander Group Supertech - 140 acre township project Real Estate 65 N.A.
IFC Idea Cellular Limited Telecom 65 1%
© Grant Thornton India LLP. All rights reserved. 12
Vishesh Chandiok Harish HV Mahad N Sridhar V
Siddhartha Nigam Dhanraj Bhagat Prashant Mehra Raja Lahiri
Darshana Kadakia David Panna Ashish Chhawchharia Sumeet Abrol
Manish Saxena Vibhor Sharma Vrinda Mathur Vikarth Kumar
Abhay Anand Pankaj Chopda Shanthi Vijetha Anirudh Gupta
Our Corporate Finance practice comprises 100 senior specialists with over 400 years of team experience and
providing end-to-end solutions.
© Grant Thornton India LLP. All rights reserved.
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.
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