Way2wealth Brokers Pvt Ltd, the equity and commodities broking arm of Bangalore-based Coffee Day Holdings, has acquired a city based non banking financial company (NBFC), Prudential Integrated Finances (PIF). The company was a part of the vehicle financing firm Prakash Leasing. The deal size is not disclosed.
Way2Wealth will use PIF for securities lending. Way2wealth is ready to lend up to Rs 150 crore on its capital base. The funds will be generated trough internal accruals on an incremental basis. The firm also plans to rope in a strategic partner.
Way2wealth plans to grow its business through the acquisition as it is looking at growing its Asset under management (AUM) by 50% during the next fiscal year. It currently manages assets worth Rs 1,000 crore. The firm has also appointed a core team from IL&FS group and the ICICI group to increase its AUM.
There are currently 140 Way2wealth outlets across the country. It plans to increase this number to 200 by the next fiscal. The firm currently offers services such as equity, derivatives, currency futures, commodities trading, IPO's, insurance (life/non-life), mutual funds, portfolio management services & depository services.
Coffee Day Holdings, the parent of way2wealth, is a Rs 800 crore company. The firm is expanding its presence in SEZ developments as well as in the hospitality sector. Besides retailing coffee through its Café Coffee Day outlets across the country, it also deals in exports of coffee.
Wednesday, March 11, 2009
KPMG: Emerging markets continue to narrow the M&A gap
The number of Merger & Acquisition (M&A) deals involving trade buyers from the emerging markets buying into the developed economies is holding up better in the face of the credit crisis than deals going in the opposite direction; yet fears remain over how long this trend can continue. According to the latest Emerging Markets International Acquisition Tracker (EMIAT) from KPMG’s Advisory practice, the second half of 2008 saw a 28 percent decline in the number of emerging-to-developed (E2D) deals, where companies from the emerging markets made an acquisition in the developed markets. This is compared to a 37 percent decline in developed-to-emerging (D2E) deals. Only 107 E2D deals were registered in six months, the lowest total since the second half of 2006. On the other side of the equation, the EMIAT recorded 230 D2E deals; the lowest figure since the beginning of 2003. While E2D deal volumes remain firmly in the shadow of their D2E counterparts, the gap is narrowing. Since the second half of 2006, when E2D deals represented 23 percent of the D2E total, that gap has been steadily closing to stand at 47 percent in the most recent EMIAT. For the purposes of the EMIAT, deals are monitored between a basket of 11 developed economies and a basket of 11 emerging, high growth economies. Deals involving private equity or institutional backing are not included, thereby creating a truer picture of the ability and appetite of trade buyers in a particular country to execute deals.
Commenting on the latest EMIAT, Ian Gomes, Chairman of KPMG’s High Growth Markets practice for KPMG in the U.K, said: “Cross-border deals emanating from the emerging markets appear to be holding up slightly better than those from their developed market counterparts – although both are still in serious decline. However, before we get too carried away with the apparent robust nature of the emerging market trade buyer, it’s worth noting several factors which I expect to further constrain outbound deal activity in the future. First and foremost is the confidence factor. Before the credit crisis struck, trade buyers were swept along by a wave of enthusiasm once they saw their national champions closing landmark deals which gave them a foothold in the developed markets. Emboldened by their countrymen’s success, they looked for a piece of that action themselves. Just as such deals initially inspired confidence, the way in which some of them have subsequently run into trouble has now dented confidence back at home, stifling the collective acquisitive urge.”
Commenting on the latest EMIAT, Ian Gomes, Chairman of KPMG’s High Growth Markets practice for KPMG in the U.K, said: “Cross-border deals emanating from the emerging markets appear to be holding up slightly better than those from their developed market counterparts – although both are still in serious decline. However, before we get too carried away with the apparent robust nature of the emerging market trade buyer, it’s worth noting several factors which I expect to further constrain outbound deal activity in the future. First and foremost is the confidence factor. Before the credit crisis struck, trade buyers were swept along by a wave of enthusiasm once they saw their national champions closing landmark deals which gave them a foothold in the developed markets. Emboldened by their countrymen’s success, they looked for a piece of that action themselves. Just as such deals initially inspired confidence, the way in which some of them have subsequently run into trouble has now dented confidence back at home, stifling the collective acquisitive urge.”
Cellworks Group raises US$10 mn from US-based PE fund
Bangalore-based Cellworks Group Inc., which also has an office in California, has raised about $8-10 million (Rs41.44-51.80 crore) from a California private equity (PE) investor, details of which will be announced in the next few weeks, says its co-founder and chief executive Taher Abbasi.
Still, in a financing environment that is getting more challenging by the day, if an Indian biotechnology start-up raises close to $10 million in private equity it doesn’t necessarily signal an uptick in the biotech fortunes, rather this sets it apart from the rest as many of them begin to look for government money.
Challenges ahead: ABLE’s director general Shrikumar Suryanarayan. Abbasi, who has been negotiating this deal for some time, agrees that “investors are not issuing new term sheets and new deals are on hold”.
As the stock market in the US continues to fall, biotech companies have been hit hard—120 of the 370 public companies in that country have less than six months of cash, according to the US trade body Biotech Industry Organization’s 26 February report. In comparison, the Indian biotech industry seems slightly cushioned.
“Indian companies have a service model inbuilt in their business…it’s learn while you earn,” says Shrikumar Suryanarayan, director general of the industry body Association of Biotech Led Enterprises (ABLE). The few start-ups that engage in research and development, he adds, are cross-border entities which use the Indian arm for cost reduction as India continues to be an affordable innovation destination.
The true impact of the slowdown on the sector will emerge when the annual industry report is released in June by ABLE and the trade journal BioSpectrum, but experts think as the money supply gets tighter there’s a big opportunity for India.
“Pressure on cost reduction is not ruled out but it’ll overall be good as Indian bio-services will now become affordable to local start-ups,” says Suryanarayan. He draws parallels from the IT industry where services from leading vendors such as Infosys Technologies Ltd and Wipro Ltd were unaffordable to Indian technology companies until the dot-com bust in 2000-01 which eventually rationalized the rates.
Still, in a financing environment that is getting more challenging by the day, if an Indian biotechnology start-up raises close to $10 million in private equity it doesn’t necessarily signal an uptick in the biotech fortunes, rather this sets it apart from the rest as many of them begin to look for government money.
Challenges ahead: ABLE’s director general Shrikumar Suryanarayan. Abbasi, who has been negotiating this deal for some time, agrees that “investors are not issuing new term sheets and new deals are on hold”.
As the stock market in the US continues to fall, biotech companies have been hit hard—120 of the 370 public companies in that country have less than six months of cash, according to the US trade body Biotech Industry Organization’s 26 February report. In comparison, the Indian biotech industry seems slightly cushioned.
“Indian companies have a service model inbuilt in their business…it’s learn while you earn,” says Shrikumar Suryanarayan, director general of the industry body Association of Biotech Led Enterprises (ABLE). The few start-ups that engage in research and development, he adds, are cross-border entities which use the Indian arm for cost reduction as India continues to be an affordable innovation destination.
The true impact of the slowdown on the sector will emerge when the annual industry report is released in June by ABLE and the trade journal BioSpectrum, but experts think as the money supply gets tighter there’s a big opportunity for India.
“Pressure on cost reduction is not ruled out but it’ll overall be good as Indian bio-services will now become affordable to local start-ups,” says Suryanarayan. He draws parallels from the IT industry where services from leading vendors such as Infosys Technologies Ltd and Wipro Ltd were unaffordable to Indian technology companies until the dot-com bust in 2000-01 which eventually rationalized the rates.
Tuesday, March 10, 2009
Consolidation in global pharma industry
Global pharma industry is facing stiff challenges due to (1) dwindling research pipelines and (2) patent expiry of top selling drugs over the next few years. US-based Merck & Co on Monday said it is acquiring Schering Plough for $41.1 bn in a cash-and-stock deal to create a $42-bn drug major. The deal comes just six weeks after Pfizer Inc gobbled up Wyeth for a record $68 bn. The acquisition gives Merck full rights to cholesterol pills Zetia and Vytorin and experimental treatments for blood clots, asthma and schizophrenia.
Implications in India
According to the MD and sector expert of ChrysCapital—Sanjiv Kaul, the impact of the deal will be limited in India as both companies have limited presence in the industry. The Merck MSD-Fulford India (Schering-Plough owns 54% of Fulford) combine will have annual sales revenue of Rs 200-250 crore in sales and it will be ranked among the top 50 companies in India with a combined work force of 1,200 employees. Fulford is a listed company and it is possible that Merck MSD may have to make an open offer to the former’s shareholders. When contacted, the spokeswoman for Merck’s Indian operations said: ”At this time, it is premature to discuss any specific plans with respect to the local market.”
Some pharma analysts believe that an open offer is not mandatory. “Both Merck and Schering Plough are US-based companies. The product range of Merck India and Fulford do not overlap. Merck MSD’s current market range in India covers its cardiovascular, vaccines, metabolics and critical care segments, while Fulford has strong presence in the dermatology segment. Fulford clocked sales of Rs 187 crore in 2008. Merck MSD’s sales figures in India are not available as it’s not listed. The firm had launched operations in India in 2005 and pharma analysts say its Inian revenues are less than Rs 50 crore.
In the end, industry will be left with a few big players,” said Mr Kaul. Merck chairman and CEO Richard T Clark said, “The combined company will benefit from a formidable research and development pipeline, a significantly broader portfolio of medicines and an expanded presence in key international markets, particularly in highgrowth emerging markets.”
Implications in India
According to the MD and sector expert of ChrysCapital—Sanjiv Kaul, the impact of the deal will be limited in India as both companies have limited presence in the industry. The Merck MSD-Fulford India (Schering-Plough owns 54% of Fulford) combine will have annual sales revenue of Rs 200-250 crore in sales and it will be ranked among the top 50 companies in India with a combined work force of 1,200 employees. Fulford is a listed company and it is possible that Merck MSD may have to make an open offer to the former’s shareholders. When contacted, the spokeswoman for Merck’s Indian operations said: ”At this time, it is premature to discuss any specific plans with respect to the local market.”
Some pharma analysts believe that an open offer is not mandatory. “Both Merck and Schering Plough are US-based companies. The product range of Merck India and Fulford do not overlap. Merck MSD’s current market range in India covers its cardiovascular, vaccines, metabolics and critical care segments, while Fulford has strong presence in the dermatology segment. Fulford clocked sales of Rs 187 crore in 2008. Merck MSD’s sales figures in India are not available as it’s not listed. The firm had launched operations in India in 2005 and pharma analysts say its Inian revenues are less than Rs 50 crore.
In the end, industry will be left with a few big players,” said Mr Kaul. Merck chairman and CEO Richard T Clark said, “The combined company will benefit from a formidable research and development pipeline, a significantly broader portfolio of medicines and an expanded presence in key international markets, particularly in highgrowth emerging markets.”
SpiceJet, GoAir in talks for consolidation
Delhi-based low-cost carrier SpiceJet is in talks with the Wadia group-owned GoAir for either a merger or to acquire a controlling stake.Sources close to the development said SpiceJet CEO Sanjay Aggarwal met GoAir Managing Director Jeh Wadia to discuss a deal late last month.When Business Standard contacted Aggarwal, he said: “It is true that Jeh and I travelled together. But I cannot comment on anything relating to a deal at the moment.”He said he had “said before that there is a need for more consolidation in the market and that there will be fewer carriers than at present”.Pointing out that there are several ways of organic growth, he added that “consolidation is definitely one of them, and it may take place through a merger or an acquisition”.Wadia, however, declined to comment on the issue. “How can I comment on market speculation?” he said in reply to a question on whether SpiceJet had approached his airline for an alliance. An email questionnaire sent to him was unanswered.Sources from both companies also said SpiceJet recently made an offer to GoAir Chief Financial Officer G P Gupta to join the Delhi-based airline as chief administrative officer.On February 26, Aggarwal told an international news agency SpiceJet wanted to set up a regional airline to connect smaller cities in the country.Industry experts said another advantage of a merger would be the fact that GoAir was looking at increasing its fleet to 20 aircraft by 2011, from five at present.
Sodexo Announces the Acquisition of Radhakrishna Hospitality Services Group
Sodexo (PARIS:SW) (OTCBB:SDXAY) announced today that it has signed a binding agreement to acquire the Radhakrishna Hospitality Services Group (RKHS), one of the leading providers of Food and Facilities Management services in India.
Completion of this transaction is subject to customary closing conditions. The parties expect to close the transaction before the summer of 2009.
Founded in 1966, RKHS is today a leader in the Food and Facilities Management services market in India, serving a prestigious client base in 22 states and employs 20,000 people across more than 1,000 sites. For Fiscal year ended March 31, 2008, RKHS generated 70 million euros of revenues.
Sodexo has been a major provider of Food and Facilities Management services in India for more than 10 years. With this acquisition, Sodexo significantly reinforces its position and takes clear market leadership in India, a country with the second largest population in the world and which offers considerable future growth potential.
Through a new combined entity, representing Sodexo’s existing Food and Facilities Management operations in India together with RKHS, Sodexo will offer its clients a comprehensive range of tailored solutions designed to enhance their reputation, improve efficiency of their employees, preserve the value of their assets and optimise their resources.
With a view to bringing his valuable insight and knowledge of both the Company and the Indian market, Mr Raju Shete will become non executive Chairman of the combined entity.
About Sodexo
Sodexo, founded in 1966 by Pierre Bellon, is a world leader in Food and Facilities Management services, with more than 355,000 employees on 30,600 sites in 80 countries. For Fiscal year ended August 31, 2008, Sodexo had revenues of 13.6 billion Euro. Listed on Euronext Paris, the Group’s current market capitalization is 5.3 billion Eur
Completion of this transaction is subject to customary closing conditions. The parties expect to close the transaction before the summer of 2009.
Founded in 1966, RKHS is today a leader in the Food and Facilities Management services market in India, serving a prestigious client base in 22 states and employs 20,000 people across more than 1,000 sites. For Fiscal year ended March 31, 2008, RKHS generated 70 million euros of revenues.
Sodexo has been a major provider of Food and Facilities Management services in India for more than 10 years. With this acquisition, Sodexo significantly reinforces its position and takes clear market leadership in India, a country with the second largest population in the world and which offers considerable future growth potential.
Through a new combined entity, representing Sodexo’s existing Food and Facilities Management operations in India together with RKHS, Sodexo will offer its clients a comprehensive range of tailored solutions designed to enhance their reputation, improve efficiency of their employees, preserve the value of their assets and optimise their resources.
With a view to bringing his valuable insight and knowledge of both the Company and the Indian market, Mr Raju Shete will become non executive Chairman of the combined entity.
About Sodexo
Sodexo, founded in 1966 by Pierre Bellon, is a world leader in Food and Facilities Management services, with more than 355,000 employees on 30,600 sites in 80 countries. For Fiscal year ended August 31, 2008, Sodexo had revenues of 13.6 billion Euro. Listed on Euronext Paris, the Group’s current market capitalization is 5.3 billion Eur
Aditya Birla completes Apollo Sindhoori acquisition
Diversified company Aditya Birla Nuvo Ltd Monday said it has completed the acquisition of 76 percent stake in the retail broking firm of the Apollo Hospitals Group. The group bought 56 percent in Apollo Sindhoori Capital Investment from the promoters and another 20 percent through an open offer.
The acquired company is a leading player in the financial services sector with over 10 years of experience in the share broking business. It has a network of over 221 own and 687 franchisee branches, and a customer base in excess of 175,000.
'The acquisition not only gives us an opportunity to expand our spectrum of offerings but also presents us a strong customer base, distributor franchise and most importantly an unparalleled talent pool,' said Ajay Srinivasan, chief executive (financial services), Aditya Birla Group.
The group has a presence across various financial services verticals that include life insurance, fund management, among others.
In 2008-09, the financial services business crossed consolidated revenues of $621 million for the first nine months, a growth of over 51 percent from corresponding period last year.
The acquired company is a leading player in the financial services sector with over 10 years of experience in the share broking business. It has a network of over 221 own and 687 franchisee branches, and a customer base in excess of 175,000.
'The acquisition not only gives us an opportunity to expand our spectrum of offerings but also presents us a strong customer base, distributor franchise and most importantly an unparalleled talent pool,' said Ajay Srinivasan, chief executive (financial services), Aditya Birla Group.
The group has a presence across various financial services verticals that include life insurance, fund management, among others.
In 2008-09, the financial services business crossed consolidated revenues of $621 million for the first nine months, a growth of over 51 percent from corresponding period last year.
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