Dealtracker DealTracker - IBEF · We are pleased to present Grant Thornton Dealtracker Report for 3rd Quarter of 2014 (July – September, 2014) which captures deal data (value/volumes)

© Grant Thornton India LLP. All rights reserved.

DealTracker

Third Quarter, 2014

Dealtracker Providing M&A and Private Equity Deal Insight

Volume 10.9


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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


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


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


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%


4%

Manufacturing 3%

Transport & Logistics

2%


2%

others 8%


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


Sector Round-up Q3 2014

IT & ITES 26%

Manufacturing 13%


Biotech 12%


9%


6%


5%


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%


Biotech 6%


2%


2%

Others 7%

M&A Q3 2014 By Value

IT & ITES 42%


Biotech 11% Real Estate

6%

Retail & Consumer

6%


6%


5%

Education 4%


4%

Others 16%

PE Q3 2014 - By volume

IT & ITES 51%


9%

Real Estate 9%


7%

Retail & Consumer

6%


5%


Biotech 4%


3%

Others 6%

PE Q3 2014 By Value


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


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


Adani Power Ltd Lanco Infratech 1,200 MW plant Energy & Natural Resources


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


JSW Steel Limited Welspun Maxsteel Limited Manufacturing



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%


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.


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.


Grant Thornton India LLP is a member firm within Grant Thornton International Ltd. The firm is one of the oldest and most prestigious accountancy firms in the country.

Today, it has grown to be one of the largest accountancy and advisory firms in India with nearly 1,200 professional staff in New Delhi, Bangalore, Chandigarh, Chennai,

Gurgaon, Hyderabad, Kolkata, Mumbai and Pune, and affiliate arrangements in most of the major towns and cities across the country.

About Grant Thornton

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Documents

Dealtracker DealTracker - IBEF · We are pleased to present Grant Thornton Dealtracker Report for 3rd Quarter of 2014 (July – September, 2014) which captures deal data (value/volumes)