M AND A Dreams of Mid Size Indian Corporate

Big or small deals don’t just happen over a cup of coffee or, for those who like high-seas, on a toast of champagne. It essentially needs synergetic mindset, ambitious growth-plans and value-creation for each other to walk down the lanes of opportunity. Mergers or acquisitions, or in short, business cross-overs are almost like marriages, perceives many deal-makers. A firm commits to another partner to be there as and when required. And the togetherness comes naturally, after building sustained relationship skills. Well, this is the mantra that has been maintained by major funds across the globe. One such recent deal of Actis-Paras pharma with UK-based Reckitt has clearly disseminated it. And the message was loud and clear. After squaring-off one of the biggest deals in India, for this year, the Actis Private Equity Fund South Asia head J M Trivedi particularly stressed out on – relationship, trust and chemistry, to describe the essentials for any acquisition. Sharing his years-long partnership experience with Paras founder to a financial daily, Mr Trivedi mentioned that they both met each other before 2000. But, Actis only picked up the first tranche of equity in Paras during 2006. The deal only struck, when both felt tremendous volume of common respect and interest for each other. To make it significant, they nurtured the relationship in a diligent manner so as to realize their common objective. The Rs 400 crore Paras group is sold off at Rs 3,260 crore, last month. Almost eight times of its current turnover. Isn’t that amazing? Both parties have earned of their value that they have created since 2006. The satisfaction is not the money, but the value that they have seeded together.

The other vital ingredient is –how to frame missions accurately and express it out to the right partner. Other than keeping financial statements up-to-date, a successful deal could only be cracked with a well-thought-out communication strategy. Many a times, potentially grown small firms hesitate to talk to some of the funds/ advisors in seeking right strategies on debt-financing or mergers or acquisitions or expansion plans. And thus, they fail in finding a right partner who could hand-hold them at all odds and take their missions to new heights.

Along sometime, especially after global financial crisis, some of the best promising advisors have emerged out in India for small firms to categorically support them to make them big. Fortunately, the western world has unfolded the red-carpet for small-sized promising firms. What’s more, even domestic market has expanded in last One year on government spending and agricultural income. The plethora of opportunities has certainly risen for smaller-sized firms in India. For them, it’s time to shine out. The only need-of-the-hour is to get along with experienced partner or business advisor, who, in turn, can convert adversities into opportunities and create value-prospects for future growth. Mind well, groups such as – Reliance, Bharti, Hero, Bajaj and Essar didn’t become giants overnight. They have had enough of good and bad people along with their successful journey.

So Scratching heads wouldn’t bring solutions, but clicking right buttons would certainly do. Go out and express your dreams….

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