M&A deal tally falls to 8-month low in Au­gust

Financial Chronicle - - MONEY GAME - FC BU­REAU

COR­PO­RATE In­dia's merger and ac­qui­si­tion ac­tiv­ity fell to an eight-month low in Au­gust with 33 deals ag­gre­gat­ing to $0.6 bil­lion, largely ow­ing to the ab­sence of big ticket trans­ac­tions, says a Grant Thorn­ton re­port.

Ac­cord­ing to the lat­est Deal Tracker re­port, on a year-on-year ba­sis, the deal val­ues dropped 32 per cent, while there was also a fall of 31 per cent in terms of num­ber of trans­ac­tions.

“Lack of con­clu­sion on large ticket IBC (In­sol­vency and Bank­ruptcy Code re­lated) trans­ac­tions and other do­mes­tic or cross-bor­der trans­ac­tions im­pacted the deal re­port card in Au­gust. Pharma, health­care and biotech and me­dia and en­ter­tain­ment sec­tors wit­nessed the max­i­mum ac­tiv­ity,” said Pankaj Chopda, di­rec­tor, Grant Thorn­ton In­dia.

In Au­gust, the startup sec­tor ac­counted for 37 per cent of deal vol­umes as es­tab­lished cor­po­rates tar­geted them to digi­tise their op­er­a­tions, lever­age op­er­a­tional ef­fi­cien­cies ex­pand con­sumer base. The me­dia and en­ter­tain­ment sec­tor saw 4 deals, of which two were in the en­ter­tain­ment (mul­ti­plex and gam­ing) space.

The top deal in Au­gust was Con­stel­la­tion Al­pha Cap­i­tal Corp’s ac­qui­si­tion of Medall Health­care for $212 mil­lion—the largest in­vest­ment in an In­dian di­ag­nos­tics com­pany to date.

Not­with­stand­ing the fall in Au­gust deal value, the Jan­uary-Au­gust M&A deal tally recorded a ro­bust 2.3 times rise on a year-on-year ba­sis, pri­mar­ily on ac­count of re­vived do­mes­tic and cross­bor­der deal ac­tiv­ity.

The year so far has reg­is­tered 12 deals in the bil­lion­dol­lar cat­e­gory and 33 deals val­ued at and over $100 mil­lion each com­pared with only two deals in the bil­lion­dol­lar cat­e­gory and 23 deals val­ued at and over $100 mil­lion each in the cor­re­spond­ing pe­riod last year.

Go­ing for­ward, deal ac­tiv­ity is ex­pected to be bullish in sec­tors like BFSI, con­sumer and re­tail, man­u­fac­tur­ing, IT&ITES and pharma, health­care and biotech as these seg­ments are closely re­lated to con­sumer con­sump­tion trends and life­style. Fur­ther, lack of re­lief to power firms fac­ing in­sol­vency suits un­der IBC law, will also drive M&A trans­ac­tions in the sec­tor, Chopda noted.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.