India’s leading M&A Advisors and Business Strategy Consultants
The recent wave of mergers and acquisitions (M&A) is set to continue with 59% of global companies now planning to acquire in the next 12 months according to a survey of more than 1,600 executives in 53 countries. This is the highest appetite to acquire recorded by the survey in its six-year history.
The surveyfinds an M&A market buoyed by record values in 2015 set for further growth in the next year. With global deal value up 35% on 2014 and more US$10b+ megadeals already announced in 2015 than in any previous year, the prospect of further growth in the M&A market looks certain. Four out of five executives (83%) expect activity to increase.
These positive sentiments are fuelled by their own burgeoning pipelines – which continue to expand, with 55% of companies now having three or more deals under consideration.
With modest increases in global GDP, organic growth alone is not enough for companies to expand and reshape at the pace they need. Technology and changing consumer preferences are disrupting business models and blurring sector boundaries. In that context, the search for growth is lifting deal-making to record highs – and executives are focusing on M&A to secure innovation, competitive advantage and market share for the foreseeable future.”
Acquisition appetite at a six-year high
The current deal environment is fostering M&A intentions. Executives are more confident than at any time in the past six years about the quality and number of deal opportunities and the likelihood of closing acquisitions.
Despite the high appetite to acquire, any fears about an overheating market can be tempered by strong rigor around deals. Executives are judicious about how they use M&A – almost three quarters (73%) have walked away from deals in the past 12 months because they were not fully aligned with their strategy.
Executives are taking a long-term view and evaluating deals more carefully than ever before. They are stepping back when necessary. This is not ‘a deals for deals sake mentality,’”
Sector convergence – a clear blurring of industry
The continuing convergence of industries looks set to accelerate deal making, with almost half (48%) planning cross-sector investments. Companies are looking to seize competitive advantage as new technology impacts everything from production to services.
Acquisitions into manufacturing segments were the most cited. Second was retail and wholesale, followed by government and public services acquisitions.
The sectors with the highest level of M&A intent are oil and gas (69%), consumer products (67%), mining and metals (67%), diversified industrial products (66%), and power and utilities (65%). Pharmaceutical sector is likely to see major M&A activity in the coming year with the consolidation of Indian pharmaceutical sector phase still going on and aspirations of Indian pharma companies on global market.
Cross-border deals dominate and dealmakers return to
Cross-border acquisitions look set to dominate the deals market, with 70% of respondents looking at non-domestic deals. Almost a third (29%) plan to focus on cross-border deals close to home, while 41% are looking further afield.
Compared to six months ago, more respondents (40% versus 35%) now plan to allocate at least 10% of acquisition capital to emerging markets. However, the majority of acquisition capital will be invested in developed markets. There is a significant increase (26%) in the number of executives now looking to acquire in the Eurozone.
Mature markets continue to drive M&A activity. With the majority of potential acquirers looking beyond their own domestic borders, there is a marked strengthening among executives around doing deals in the Eurozone. This is down to increased confidence in the stability of the region. The Eurozone also has a good supply of high-quality assets and attractive pricing due to currency fluctuations.
The US, UK, Germany, China and India are the overall top five investment destinations of choice. Brazil, the US, France, Germany, Australia and the UK look set to be the prominent acquirers.
Steadfast economic confidence supporting deal
Despite significant market volatility during the survey period, companies remain confident about dealmaking in the current macroeconomic environment. Economic confidence is steadfastly robust, identical to six months ago, with 83% of executives optimistic about the global economy. Long-term prospects for growth – albeit modest – are shaping views.
That is supporting strong corporate confidence, which is now more upbeat about creating new jobs, with almost half (45%) looking to hire talent compared to a third (29%) six months ago.
Companies do remain vigilant to potential challenges, including potential economic headwinds. A third (29%) of respondents view increased global and regional political instability as the biggest business risk. A quarter (24%) cite uncertainty associated with volatility in commodities and currencies. Interestingly, a greater number of executives (24%) see the economic and political situation in the Eurozone as a bigger risk than slowing growth in emerging markets (18%).
One danger that is almost universally recognized is cybersecurity around deals, with more than 90% of respondents viewing this as a significant risk to their deal processes.
The robust confidence in the global economy may come as a surprise to some. However, many of the executives now have years of experience operating through the worst economic environment in decades. Therefore, they are able to look beyond short-term volatility to longer-term growth opportunities.
M&A set to climb a sustainable path to growth
Steady corporate confidence, robust economic sentiments and disruptive sector convergence look set to fuel even more M&A activity in the coming year.
With all signs in the deal market pointing upwards, some question the trend and wonder if the market is overheating, however, executives are acting prudently as they look for growth. They are conducting more thorough due diligence and are prepared to walk away from transactions that do not meet their strategic goals.
“In short, M&A is becoming an essential tool for generating long-term value. It’s a critical part of a sustainable strategy to build the next decade’s platform for growth.”
(Courtesy: E&Y Survey 2015)
UCS, a leading management consultancy firm in India recently announced opening of its new division which focusses on assisting companies in restructuring their businesses, raising of capital from secured sources, NRIs, Institutional finance, management training, technical support particularly in pharmaceutical sector.
“Unicorn Corporate Solutions (UCS) is an apex management consultancy firm in India specialising in providing cross border merger and acquisition advisory services in India. Besides M&A, UCS advisors have expertise in in providing end to end consultancy for business development, launching new business, strategy consulting, turnkey project management consulting for setting up pharmaceutical manufacturing units, development of business and marketing strategies for pharmaceutical, FMCG, healthcare, solar, and hospitality businesses.
Pharmaceutical engineering turnkey project consulting is one of the key divisions of UCS which is growing very fast. UCS has well qualified team of professionals managing all aspects of planning, construction, validation and tech transfer for new manufacturing units across India, middle –east and Africa region.
UCS also provides complete hand holding services to MNCs and other foreign companies planning to enter Indian markets for their business set up, joint venture, collaborations, product sourcing, liasoning office etc. Well qualified team of finance professionals and marketing consultants offer services with full satisfaction and transparency.
UCS also assists company in raising finance, debt restructuring particularly for MSME companies.
UCS is a leading provider of top quality talents for the industry.
UCS a leading management consultancy firm in India specialising in merger and acquisition in pharmaceutical and healthcare sector announced successful acquisition of Needs Pharmaceuticals Pvt. Ltd., Roorkee By its client M/s Oriflame India Pvt. Ltd. (a subsidiary of Oriflame Inc., Sweden). UCS acted as advisors for Oriflame India for this acquisition deal.
Oriflame India having its present set up at Noida was planning to expand their manufacturing and marketing base in India and were looking for a WHO certified manufacturing facility which can act as its base for its new range of products to launched in India and South Asian region. Acquisition of the Needs Pharmaceuticals, a WHO certified facility having their plant in Roorkee will go a long way in serving the needs of Oriflame India in meeting its desired business objectives.
of setting up pharmaceutical manufacturing units in India, Asia and Africa has been awarded Project management Consultancy for setting up of an ultra-modern pharmaceutical oral formulation unit, R&D setup in Roorkee by Salas Pharmaceuticals Pvt. Ltd. As turnkey consultants for overall management of the project.
Scope involves, conceptualisation, planning, land selection, government approvals, supervising construction of facility, sourcing of plants and machinery, installation, commissioning, validation and regulatory approvals by European regulatory agencies.
Commenting on the development, Dr Priya Das, PhD, Director of the UCS said that it is a major contract for UCS and our team is very experienced to deliver world lass facility as we have completed several similar project in India and abroad in the past.
UCS a leading management consultancy firm in India specialising in merger and acquisition in pharmaceutical and healthcare sector announced formation of a special division comprising of business management consultants, pharmaceutical technical experts, finance professionals for providing world class management consultancy to the Medium and Small Scale Pharmaceutical (MSME) companies which are under stress due to increasing competitions, quality issue, lack of finance / quality manpower, decline of contract manufacturing business, no R&D and pressure form financial institutions and regulatory agencies.
There are more than 20,000 small to medium pharmaceutical manufacturing companies in India. Most of them are under stress because of one reason or other and are finding it difficult to overcome the situations due to lack of management bandwidth, finance or technology. UCS consultants will devise special strategies for each of these companies for their revival, collaborations, market development, plant upgradation, business plan development, in-licensing or out-licensing, debt restructuring or exit if required. Most of the MSME companies cannot afford the services of big 4 management consultancy firms and are looking for reliable, proven, trustworthy advisors who can work with them and take them out of the crisis situation or give them a boost in growth without costing much. UCS has understood the need and has worked out special packages or success based fee structures for most of the services to meet the needs of the industry.
There are large number of pharmaceutical manufacturing companies in India which are looking for collaborations or exit in north India and at the same time there are several MNCs which are looking for acquisition and partnership with quality units in India. UCS has specially worked out a strategy to assist global pharmaceutical companies in identifying right pharmaceutical target for acquisition in India and assist in complete process of merger and acquisition in India.
Number of companies have started approaching UCS for availing growth and revival solutions.