 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The year 2011 witnessed 43 transactions by US companies in India and 23 transactions by Indian companies in the US. Compared to 2010, these numbers represents a 50% decrease for Indian companies and no change for the US companies.
In terms of value, US companies spend over $1.1 billion on Indian acquisitions in 2011 which represents a 75% decline from 2010. Indian companies spent over $1.2 billion in US acquisitions which is 50% lower than in 2010. Majority of transactions were 100% acquisitions of shares with internal accruals as the prominent financing option.
The strategic trends point to an increase in the number of India based acquisitions by the US companies in infrastructure services, epublishing, medical equipments, and electrical equipment sector.
The majority of US transactions into India in 2011 were in the form of strategic investment in niche infrastructure segments such as project development services, basic building blocks manufacturers, water distribution, and power equipment manufacturers.
|
|
|
|
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| In recent years, cloud computing has been a central topic in IT spending discussions at companies across the globe. As young businesses have developed new cloud-focused products and services, larger companies have expressed a desire to make acquisitions to bolster their cloud technology portfolios. As a result, M&A in the cloud sector has received much attention from industry leaders and financial sponsors alike.
This report provides an overview on the recent trends in cloud computing M&A, along with precedent transactions and public company comparables to demonstrate the most recent valuations throughout the industry. Additionally, a graphical representation of the cloud computing sector, organized by sub-sector, has been provided.
|
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
This report presents the top five mistakes commonly made by US Companies as they establish operations or expand in India:
1. Lack of Planning to manage risks and out-of-control events; 2. Choosing Partners who do not have enough at stake; 3. Due Diligence not focused on hidden skeletons; 4. Advisors without enough US and India experience; and 5. Lack of long-term Commitment to India
The report discusses three real life case studies of IVG's customers that illustrates key lessons learned while navigating the Indian landscape. These case studies are:
1. Water Filtration Equipment Company assessing India's market potential; 2. Auto Component Manufacturer setting manufacturing plant in India; and 3. Retailer of Lifestyle Products selling in India
Other important considerations discussed in this report include legal, recruitment, retention, negotiations, and performance monitoring.
|
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The liberalisation of Indian Insurance sector in 1999 led to the entry of several large private sector insurers which ushered in a phase of strong growth in the sector, both in Life and Non Life insurance segments. The growth in the sector has further been aided by a favorable macroeconomic environment with a high GDP growth which has led to rising income levels, increased demand for vehicles, increasing health awareness and health expenditure and a shift from agricultural economy to industrial and service-oriented economy.
During the last ten years, the Non Life Sector has moved towards a higher annual growth trajectory of 15% with Gross Written Premium of Rs USD 9.5 billion (Rs 425 billion in FY11) as compared to an average annual growth rate of 12.5% in the pre-liberalisation era of 1993-2001.
|
|
|
|
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
The year 2010 witnessed a strong momentum in the US-bound acquisitions by Indian companies. Indian companies accounted for a total of over 50 US bound investments in 2010 compared to 15 in 2009. The cumulative transaction value stands at $2,200 compared to $300 in 2009. Majority of transactions were full acquisitions with internal accruals as the prominent financing option.
Robust economic growth and a surge in demand for natural resources in India combined with high debt-to-equity ratio and lower earnings potential of US companies is creating value-buying opportunities for Indian companies in the US. In addition, increasing domestic competitive pressures, changing economic realities and improved US-India political relations are encouraging Indian companies to seek acquisitions in the US. This also reflects how Indian companies adapted to the new economic realities and are opportunistic about global growth. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The Indian foundry is experiencing a rapid growth driven by increasing domestic demand in automotive, power, textiles, and electrical sectors. India is fourth largest producer of casting components, and has doubled casting capacity to 7 million MT since year 2002. The industry is fragmented with more than 5,000 players in the industry employing more than 500,000 persons and generating 1.5 million indirect employments. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The agricultural industry has always been the backbone of India’s sustained growth. Over the past two decades there has been a tremendous move towards mechanization of the agricultural industry in India driven by increase in power availability on the Indian farms from 30% to 70%. As the population of India continues to grow, the demand for produce grows as well. Hence, there is a greater need for multiple cropping on the farms and this in turn requires efficient and high-capacity machines. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The Indian Government through MHA is likely to spend over $ 7.5 billion and state governments close to $ 2 billion on the modernization of their police and para-military organizations in the next 3-5 years. The bulk of the expenditures will be on arms, ammunition, transport, communication equipment, bullet proof jackets, and explosive handling devices. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India has one of the fastest growing economies in the world, and the demand for oil and gas is rising at a corresponding rate. Not only is India's market potential huge, but in recent years India has emerged as one of the most prospective regions in the world with major oil and gas discoveries, both onshore and offshore. Against a crude oil production of about 37 million tons per annum (MTPA), India’s consumption currently exceeds 125 million tons. To provide energy security, the GOI is seeking investments in excess of $100 billion in both the upstream and the downstream sectors during the next 15 years.
| |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India ranks 17th in production and 12th in the consumption of machine tools in the world. The country is set to become a key player in the global machine tools industry and is likely to see substantial high-end machine tool manufacturing, even as China keeps its lead in lower end volumes. Several firms have entered the Indian machine tools sector, or announced plans for joint ventures or wholly owned subsidiaries in India.
| |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With more than 638 million-line telephone network (fixed plus cellular) India is among the top 4 networks in the world. India has one of the fastest growing telecommunications systems in the world, with system size (total connections) growing at an average of more than 20 percent per annum over the last 4 years. According to the Government of India (GOI), the demand for new telephone lines during the next 3 years is estimated to be over 200 million. The industry is considered as having the highest potential for investment in India.
| |
|
|
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| Partnering is a trend in emerging multinational companies that has changed the way acquisitions are seen in business. In many ways, this type of approach seems ideal for emerging companies: it does not tie up large amounts of resources or managers’ time to integrate both firms; it favors a risk-taking attitude and allows the company to take full advantage of the acquired firm’s physical and human capital. | |
|
|
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The information technology (IT) industry has some rather firmly established deal norms that apply worldwide. It's important to know those so you don't push where pushing is not likely to garner meaningful concessions. Knowing the norms allows you to effectively focus on the areas where you can have impact while choreographing your concessions around areas where you're not likely to win the battle anyway. You simply cannot negotiate these deals effectively unless you understand the norms. This article is a primer on understanding what are workable and fair agreements when contracting with American companies. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India is one of the largest and one of the fastest growing producers of greenhouse gases. It is estimated that 30-40 percent of India's industrial units produce sizeable quantities of pollutants. India's pollution control equipment industry is growing at 10-12 % annually, driven by government initiatives and a proactive judiciary. Local production is mainly into standard, low-tech equipment. 40% of market demand is met by imports. Germany, UK, Japan, Canada, Australia, Netherlands, and Italy are among the major suppliers. The United States is the market leader for imports, having over 30% of market share. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| The Indian healthcare industry is estimated at $35 billion and is expected to reach over $75 billion by 2012. The medical equipment market is growing at a rate of 15 percent and the demand for equipment is expected to reach $5 billion by 2012 from the current figure of $2.7 billion. Both the government and the private sector have embarked on a path to bring about a rapid growth in the industry and to manage the demand for high quality service. This has also brought a surge in demand for high-end medical devices and equipment as the specialty hospital facilities depend on the import of high-end medical equipment. | |
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India with a population of 1.16 billion provides a large and growing market for food products. India is amongst the three largest producers of agricultural commodities in the world. In addition, food is the single largest component of private consumption expenditure, accounting for about 37.8% of the total spending. Growing at about 14%, the processed food industry has started attracting increased investment to cater to both, the domestic and export demand. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India continues to offer great investment opportunities not only in the knowledge sectors, but also in more traditional sectors such as manufacturing, banking, pharmaceuticals and telecom which are likely to attract significant amounts of investment. Deal Structuring parameters in India are driven by factors such as exit, valuations, currency risks, tax consideration and government regulation. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India has targeted 20GW of Solar Power by 2022 in its Jawaharlal Nehru National Solar Mission. With more than 300 days of sunshine annually and a large customer base, India offers a great potential for off-grid PV deployments such as rural lighting and electrification, powering irrigation pump sets, back-up power generation for cellular towers, captive power generation, urban applications and highway lighting. This, combined with investor friendly policies and solar energy promotion, provides the right platform for growth. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| India has the fifth largest generation capacity in the world with an installed capacity of 152 GW as of 2009, which is about 4 percent of global power generation. The average per capita consumption of electricity in India is estimated to be 704 kWh during 2008-09. In order to provide availability of over 1000 units of per capita electricity by year 2012, over 100,000 MW of capacity addition would be required. This has resulted in massive addition plans being proposed in the sub-sectors of Generation Transmission and Distribution. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| By adopting an international competitive bidding process, allowing external commercial borrowings, and facilitating statutory clearances the government of India has opened up opportunities in the infrastructure and energy sector as never seen before. This presents a compelling opportunity for US project developers, infrastructure and power equipment companies as well as financial investors. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With a compounded annual growth rate of 19%, the radio broadcasting industry is estimated to double from the current US$ 170 million to US$ 350 million by 2013. This sector promises consistent high growth and hence an ideal India investment opportunity for US firms. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With a total market size of $5.6 billion and an average growth rate of 18 percent per year in passenger and air cargo over the last five years, the civil aviation sector in India has witnessed a rapid development. This growth will spur increased investment in airports and ground equipment |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With a rapid growth in the manufacturing sector and heavy investments in infrastructure, the $1.2 billion Indian composite industry is expected to grow at a rate of around 25% in the next 4-5 years. The key drivers of this growth will be transport, infrastructure, wind energy, and oil and gas industries in India. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With a generation capacity of 141 GW, India has the fifth largest electricity generation capacity in the world. The estimated energy requirements in India will reach approximately 950,000 MW in the year 2030. Given these conditions, there are excellent prospects for North American companies in energy efficient compressors, boilers, turbines, heat recovery technology, and heating/cooling (HVAC) systems. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| With a market size of over $4 billion, the Indian water and wastewater market is growing at a rate of 10-12 percent every year. Government related projects contribute over 50 percent of revenues in this market while the private sector contributes the rest. The water and wastewater treatment market segment is highly fragmented and unorganized. Imports constitute approximately $110 million of the $690 million market for municipal and industrial water treatment equipment. |
|
|
 |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| By 2025, India's middle class will expand more than ten times from its current size of 50 million making it the 5th largest consumer market globally. The top prospects for U.S. firms include: retail, education, garments and apparel, specialized food services, entertainment, courier services, stationary and gift shops, healthcare, fitness and personal grooming services. |
|
|
