private equity q2_2010
TRANSCRIPT
Q2,2010QUARTERLY DEAL UPDATE
Statistics and analysis of Private Equity, Venture Capital
and Mergers & Acquisitions in India
A RESEARCH PUBLICATION | July 2010
Contents
Page Number
I. Executive Summary 1
II. Private Equity Deal Flow
- Introduction 2- Deal Breakdown 3
- Sectoral Breakdown 5- Regional Outlook 9
- Top 5 Private Equity Deals 10
- 2010 YTD 13III. Private Equity Exits 14
IV. M&A Round Up - Introduction 15
- Deal Breakdown 16
- Sectoral Breakdown 18
- Regional Outlook 22- Top 5 M&A deals 23- 2010 YTD 26
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1
QUARTERLY REPORT
EXECUTIVE SUMMARY
VCCEdge puts the Indian dealscape in context bybringing to you a set of statistics analyzing IndianM&A, private equity and venture capital activityduring the second quarter of 2010.
Private Equity…
Total private equity investment in India went up bymore than 130% from $0.99 billion in Q2 2009 to$2.3 billion in Q2 2010.
The median deal amount and the average value ofprivate equity deals in Q2 2010 increased to $11million and $29 million respectively from $8 millionand $19 million in 2009.
Financials, Energy & Utilities were the mosttargeted sectors for investment with deals worth$510 million, $320 million and $306 millionrespectively.
There were 30 exits worth $1.46 billion in Q2 2010as compared to 29 exits worth $0.82 billion in Q22009.
Mergers & Acquisitions…
The deal value touched $24.8 billion in Q2 2010taking the total M&A value in the first half of 2010to $48.1 billion, up from $16.3 billion clocked inthe whole of 2009.
The number of domestic deals increased from 50worth $1.7 billion in Q2 2009 to 91 deals worth$14.0 billion in Q2 2010.
In terms of volume, the number of outbounddeals tripled from 22 in Q2 2009 to 66 in Q22010, while in terms of value the increase wasmore than 13X.
The number of inbound deals decreased to 23 inQ2 2010 from 24 deals in Q2 2009 but at a highervalue.
Telecommunication Services, Healthcare andFinancials were the most targeted sectors withdeals worth $12 billion, $3.8 billion and $3.4 billionrespectively in the latest quarter.
PRIVATE EQUITY
INTRODUCTION
Private equity investments in India continued to display steadysigns of recovery in the second quarter of 2010. Deal valuecontinued to increase for the sixth consecutive quarter and isnearly 3.5X the value seen in Q1 2009.
The first two quarters of 2010 have already witnessed $4.29billion in deal value as compared to $4.32 billion in entire2009.
Exhibit 1: Private Equity Deal Flow in India
Dea
l Val
ue
($ M
n) D
eal Vo
lum
e
$434
$386
$714$730
$1,249
$2,605
$1,526$1,710
$2,610
$2,793
$5,512
$5,369$5,333
$2,686
$3,443
$1,670
$685
$986$1,196
$1,454
$1,968$2,31868
44 45
67
116
9281
101
171
91
108
156
194
119139
88
7162
75
103 9290
0
50
100
150
200
250
0
1000
2000
3000
4000
5000
6000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2005 2006 2007 2008 2009 2010
Value ($ mn) Volume
For the quarter ended June 2010, total announced deal value was$2.3 billion, a jump of more than 130% from $0.99 billion in Q2 2009.Total deal count in Q2 2010 also increased by 45% to 90 deals, upfrom 62 in Q2 2009.
On a quarter-on-quarter basis, deal count remained nearly thesame at 90 as compared to 92 in Q1 2010 but deal value increased17% from $1.97 billion to $2.3 billion.
2
PRIVATE EQUITY
DEAL BREAKDOWN
Total number of venture capital investments announced inQ2 2010 stands at 24 with an announced value of $114million as against 15 deals at an announced value of $70million in Q2 2009 and 26 deals amounting to $160 millionin Q2 2008.
Exhibit 2: Private Equity Breakdown
Exhibit 3:Median Deal Amount ($ million)
Exhibit 4: Average Deal Size ($million)
The median deal amount and the average value in Q2 ’10 increased to $11 million and $29 million respectively as the volume of larger deals (particularly deals > $100million) increased. 3
6 15 20 20 13 5 0
35
80
108 124
91
20 24
183
295
398 396
207
67 66
0
50
100
150
200
250
300
350
400
450
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
Angel
VC
PE
8
10
15 15
8
1011
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
14
26
46
33
19
2629
0
5
10
15
20
25
30
35
40
45
50
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
PRIVATE EQUITY
Exhibit 5: Number of transactions by Deal Size
DEAL BREAKDOWN
Exhibit 6: Total investment by Deal Size
Private equity deals under $50 million accounted for 88% of total deal volume in Q2 2010.
Larger deals ($50 million and above ) accounted for 63% of total capital invested in Q2 2010 as against 40% in Q2 2009.
0% 20% 40% 60% 80% 100%
Q2 2005
Q2 2006
Q2 2007
Q2 2008
Q2 2009
Q2 2010
Undisclosed Under $5m $5 - $25 m
$25 - $50 m $50 - $100 m $100+
0% 20% 40% 60% 80% 100%
Q2 2005
Q2 2006
Q2 2007
Q2 2008
Q2 2009
Q2 2010
Under $5m $5 - $25 m $25 - $50 m $50 - $100 m $100+
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010
Undisclosed 6 28 21 23 12 11
Under $5m 14 21 11 25 21 21
$5 - $25 m 20 24 39 43 14 35
$25 - $50 m 4 12 10 15 11 12
$50 - $100 m 0 4 5 7 3 5
$100+ 0 3 5 6 1 6
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010
Under $5m 23 52 32 45 43 46
$5 - $25 m 243 293 506 552 158 433
$25 - $50 m 120 384 295 439 389 388
$50 - $100 m 0 259 308 434 166 383
$100+ 0 1618 1652 1216 230 1068
4
Other sectors, which have significantly contributed to privateequity deal value in Q2 2010, are Consumer Discretionary andHealthcare accounting for 24% of total deal value.
SECTORAL BREAKDOWN – Q2 2010
Exhibit 7: Top 5 Sectors by Deal Value in Q2 2010 ($mn)
Exhibit 9: Top 5 Sectors by Deal Volume in Q2 2010Exhibit 8: Sector Summary
PRIVATE EQUITY
Sector Volume Value Average Deal SizeConsumer Discretionary 17 297 19Consumer Staples 4 66 16Energy 2 320 160Financials 22 510 26Health Care 11 277 35Industrials 11 233 23Information technology 14 64 6Materials 4 244 61Telecommunication Services 1 1 1Utilities 4 306 102
Financials , $510
Energy , $320Utilities, $306
Consumer Discretionary, $
297
Healthcare, $277
Financials , 22
Consumer Discretionary, 17Information
Technology, 14
Healthcare, 11
Industrials, 11 , 0
Financials, Energy & Utilities were the most targeted sectorsfor investment with deals worth $510 million, $320 million and$306 million respectively in Q2 2010. Together, they accountedfor 49% of total private equity deal value during the quarter.
5
The most active sectors in terms of deal volume was Financialswith 22 deals in the quarter, followed by Consumer Discretionaryand Information Technology with 17 and 14 deals respectively.Other sectors contributing to the deal volume were Industrials &Healthcare accounting for 11 deals each.
PRIVATE EQUITY
SECTORAL BREAKDOWN
ENERGY
Energy accounted for 2.2% of deal volume but 13.8% of deal value in Q2 2010.
MATERIALS
INDUSTRIALS
Industrials accounted for 12.2% of deal volume in Q2 2010.
Materials saw 4 deals at a value of $244 million in Q2 2010.
CONSUMER DISCRETIONARY
Consumer Discretionary accounted for 18.9% of deal volume in Q2, 2010.
6
0
2
11
2
2
$0$20 $3 $14 $26
$320
0
0.5
1
1.5
2
2.5
$0$50
$100$150$200$250$300$350
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
1112
18 20
9
11
$239
$129 $148
$329
$114
$233
0
5
10
15
20
25
$0$50
$100$150$200$250$300$350
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
22
1
8
1 4
$17$54
$1
$100
$35
$244
0
2
4
6
8
10
$0
$50
$100
$150
$200
$250
$300
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
15
15
10 14
17
17
$58
$166
$74
$238
$442
$297
0
5
10
15
20
$0$100$200$300$400$500
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
PRIVATE EQUITY
SECTORAL BREAKDOWN
CONSUMER STAPLES
Consumer Staples accounted for 4.4% of deals in Q2 2010.
HEALTH CARE
Healthcare accounted for 12.2% of deals in Q2 2010.
FINANCIALS
Financials accounted for 24.4% of deals in Q2 2010.
INFORMATION TECHNOLOGY
Information technology accounted for 15.6% of deals in Q2 2010.
7
3
2
4
2
5
4
$1
$50
$18$10
$95
$66
0123456
$0
$20
$40
$60
$80
$100
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
11
917 22
22
22
$124$162
$371
$224
$426$510
0
5
10
15
20
25
$0$100$200$300$400$500$600
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
3
6
5
86
11
$30 $45$27
$136
$82
$277
024681012
$0$50
$100$150$200$250$300
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
21
9
1518
21
14
$146
$27
$333
$155 $151
$64
0
5
10
15
20
25
$0$50
$100$150$200$250$300$350
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
PRIVATE EQUITY
SECTORAL BREAKDOWN
TELECOMMUNICATION SERVICES UTLITIES
Telecommunication Services saw only one deal at an announced value of $1 million.
Utilities saw 4 deals at an announced value of $306 million in Q2 2010. The sector accounted for 13.2% of deal value in Q2 2010.
As seen in Q1 2010, Q2 also saw a large number of deals in Financials andConsumer Discretionary.
1
3
0 1
4
1$1
$271
$0
$50
$112
$1 0
1
2
3
4
5
$0
$50
$100
$150
$200
$250
$300
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
2
2
4
9 5
4$69 $62
$222 $197
$484
$306
0
2
4
6
8
10
$0
$100
$200
$300
$400
$500
$600
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
8
Jaipur
Dehradun
Indore
Ahmedabad
HyderabadPuneVizag
Bhopal
Coimbatore
Cochin
Mangalore
Mysore
Surat
Baroda
Ludhiana
LucknowKanpur
Amritsar
Jalandhar
Tier II
Mumbai
Bangalore ChennaiTier I
An analysis of private equity investment in 2010year to date by region, reveals that Maharashtrastands on top with 56 private equity deals with atotal deal value of $1.19 billion.
This is followed by Karnataka with 25 deals valuedat $678 million and Tamil Nadu with 20 dealsvalued at $479 million.
REGIONAL OUTLOOK – FIRST HALF 2010
PRIVATE EQUITY
Top 5 States
State Volume Value ($mn)
Maharashtra 56 1,187
Karnataka 25 678
Tamil Nadu 20 479
Delhi 18 357
Andhra Pradesh 12 198
Top 5 Cities
City Volume Value ($mn)
Mumbai 48 1,118
Bangalore 23 373
Chennai 17 20
Delhi 18 357
Hyderabad 9 188
9
PRIVATE EQUITYTOP 5 DEALS IN Q2 2010
Tata Power's Coal SPVs To Raise $300M From Olympus Capital
Tata Power has struck a deal to raise $300 million by selling around 15% stake in two separate special purpose vehicles (BhiraInvestments Limited and Bhivpuri Investments Limited) to Olympus Capital Holdings Asia.
Tata Power holds its interest in the KPC and Arutmin coal mines in Indonesia through these SPVs. In June 2007, the company had acquired 30% stake in these coal mines for $1.23 billion.
The proceeds will be used for acquisition of coal mines and to retire debt.
The investment is through Class B shares with no dividend rights and a capital protection arrangement.
10
Top 5 deals accounted for nearly 42% of total private equity deal value in Q2, 2010.
S No. Target Investor Value ($ Mn)1 Tata Power Ltd., Coal SPV's Olympus Capital Holdings Asia 300
2 GMR Energy Ltd. Temasek Holdings Pte. Ltd. 200
3 National Stock Exchange of India Ltd. Temasek Holdings Pte. Ltd. 175
4 Avnija Properties Ltd. Kohlberg Kravis Roberts & Co. 166
5 247Park Project, HCC Real Estate Ltd. IL&FS Milestone Fund II 122
Exhibit 10: Top 5 Private Equity deals in Q2 2010
PRIVATE EQUITY
Temasek Holdings acquired 5% stake in NSE for $175 million
Temasek Holdings picked up the 5% stake held by NYSE Euronext in NSE for $175 million, valuing the stock exchange at $3.5 billion.
In 2007, the New York Stock Exchange, had acquired 5% stake for $115 million.
NSE has two times the trading volume of Bombay Stock Exchange, despite having lower number of firms listed. It has more than half the market share in equity trading but dominates derivatives trading in the country.
TOP 5 DEALS IN Q2 2010
11
Temasek Holdings to invest $200 MN in GMR Energy
Temasek Holdings Pte. Ltd. will invest $200 million (INR 8.89 billion) in Mangalore based GMR Energy Ltd.
Temasek will invest through its wholly-owned subsidiary Claymore Investments in a structured security that will be compulsorily convertible into equity.
The company plans to enhance its installed power generation capacity from the current 808 MW to more than 6,500 MW over the next 3-4 years.
PRIVATE EQUITY
IL&FS Milestone Fund Picks Up 74% In HCC Project
IL&FS Milestone Realty Advisors acquired 74% stake in 247 HCC Park, a 1.8 million square feet commercial property located in Vikhroli, Mumbai for around $122 million (INR 5.8 billion).
The proceeds will be used to repay debt raised during the construction of the project from HDFC Ltd.
Money Matters Financial Services Ltd was the sole advisor to the deal.
TOP 5 DEALS IN Q2 2010
12
KKR To Invest $166 million in Dalmia Cement Arm
KKR will invest up to $166 million (INR 7.5 billion) in Dalmia Cement's unlisted subsidiary Avnija Properties Ltd.
The subsidiary Avnija will house DCBL’s 9 MTPA (million tonne per annum) cement manufacturing capacity, DCBL's stake in OCL India Ltd (5.3MTPA capacity) along with the upcoming green field projects of 10MTPA across the country.
The proceeds will be used for both organic/inorganic growth and de-leveraging,
JM Financial advised KKR on the transaction, while Equirus Capital acted as financial advisor to DCBL.
2010 YTD
PRIVATE EQUITY
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010*
224
390
526 540
311
182
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
2005 2006 2007 2008 2009 2010*
$2,264
$7,090
$16,284
$13,132
$4,321 $4,286
05101520253035404550
$0$100$200$300$400$500$600$700$800$900
$1,000
Value ($ mn) Volume
Exhibit 13: Private Equity Sectoral Breakdown First Half 2010
Exhibit 11: Private Equity Deal Value First Half 2010 Exhibit 12: Private Equity Deal Volume First Half 2010
13
Private equity investment in the first half of 2010has already reached $4.29 billion, which is nearlythe same level as that in 2009.
Deal value in 2009 was $4.32 billion, a sharp dropfrom the $13.1 billion seen in 2008. The number ofdeals in H1 2010 was 182 as compared to 311 in2009, which points to a higher average deal value.
Financials, Utilities and Consumer Discretionaryhave seen the highest deal value year till date.
PRIVATE EQUITY
There were 30 exits worth $1,456 million in Q2, 2010. In comparison there were 29 exits worth only $820 million in Q2, 2009.
Exhibit 14: Top Private Equity Exits in Q2’ 10
PRIVATE EQUITY EXITS – Q2 2010
Exhibit 15: Private Equity Exit Type in Q2’ 1014
M&A, 9
Secondary Sales, 3
Buyback, 2IPO, 1
Open Market, 15
S.No Target Seller Exit Type Exit Value ($mn)*
1 DLF Assets Ltd. Symphony Capital Partners Ltd Buyback 694
2 SpiceJet Ltd. WL Ross & Co. LLC. M&A 127
3 Intelligroup Inc. SAIF Partners M&A 124
4 Metropolis Healthcare Ltd India Advantage Fund Series I Secondary Sales 85
5 JBF Global Pte Ltd.Citi Venture Capital International
Growth Fund Buyback 60*Exit Value: Value of the private equity portion of the deal.
MERGERS & ACQUISITIONINTRODUCTION
Exhibit 16:M&A Deal Flow in India
Both Q1 and Q2 2010 saw some big tickets deals whichsent the total M&A deal value soaring. This signaled thereturn of investor confidence and liquidity to the market.
15
Dea
l Val
ue
($ M
n)
Deal V
olu
me
$747$994
$3,221$3,145
$3,021
$3,940 $4,116
$15,312
$22,899
$6,775
$4,992
$1,487
$7,865
$9,655
$5,244$5,137
$5,209$2,776
$3,027
$5,240
$23,304$24,771
66 62
82
104 108
86
99
129126
150158
127
153 151
123 120
101 98
116
138
185182
0
20
40
60
80
100
120
140
160
180
200
0
5000
10000
15000
20000
25000
30000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2005 2006 2007 2008 2009 2010
Value ($ mn) Volume
M&A activity in India has surged over the last few quarters. Totalannounced deal value in Q2 2010 was $24.8 billion, a 790%increase over the $2.8 billion witnessed in Q2 2009 and a 370%increase over Q4 2009. The total deal count also increased by 85%to 182 in Q2 2010 up from 98 in Q2 2009.
DEAL BREAKDOWN
Exhibit 18: M & A Type Volume
Exhibit 17:Median Deal Amount ($ million) Exhibit 19: Average Deal Size ($ million)
The median deal amount in Q2 2010 decreased to $19 million as compared to $24million in Q1 2010, but was higher than that seen in 2009.
MERGERS & ACQUISITION
16
11
15
12
1417
24
19
0
5
10
15
20
25
30
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
136
156
223241
216
94 91
37
67 7289 92
32 23
109
162149
196
112
5166
0
50
100
150
200
250
300
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
Domestic
Inbound
Outbound
53
123139
113
75
224
298
0
50
100
150
200
250
300
350
2005 2006 2007 2008 2009 Q1 2010 Q2 2010
The number of domestic deals increased from 72 and 50in Q2 2008 & Q2 2009 respectively to 91 in Q2 2010. Thevalue of domestic deals was $14 billion in Q2 2010compared to $1.7 billion in Q2 2009.
In terms of volume, the number of outbound dealstripled from 22 in Q2 2009 to 66 in Q2 2010, while interms of value the increase was more than 13X from$0.45 billion to $6.05 billion.
The number of inbound deals was nearly same at 23 inQ2 2010 as compared to 24 deals in Q2 2009, but at amuch higher value.
DEAL BREAKDOWN
MERGERS & ACQUISITION
Exhibit 20: Number of transactions by Deal Size Exhibit 21: Total investment by Deal Size
M&A deals under $100 million accounted for 90% of total deal flow in Q2 2010.
Larger deals ($100 million and above) accounted for 96% of total capital invested in Q2 2010 as against 74% in Q2 2009.
Q2'05 Q2'06 Q2'07 Q2'08 Q2'09 Q2'10
Undisclosed 30 38 86 79 59 99
Under $5 m 12 11 22 20 9 28
$5 - $25 m 13 20 19 20 11 20
$25 - $50 m 3 3 8 11 6 10
$50 - $ 100 m 2 3 5 4 5 7
$100+ 2 11 10 17 8 18
Q2'05 Q2'06 Q2'07 Q2'08 Q2'09 Q2'10
Under $5 m 22 24 51 44 12 59
$5 - $25 m 165 229 256 259 142 254
$25 - $50 m 110 90 291 362 230 354
$50 - $ 100 m 151 203 308 260 349 430
$100+ 546 3393 5869 8730 2043 23674
17
0% 20% 40% 60% 80% 100%
Q22005
Q22006
Q22007
Q22008
Q22009
Q22010
Undisclosed Under $5 m $5 - $25 m
$25 - $50 m $50 - $100 m $100 m+
0% 20% 40% 60% 80% 100%
Q22005
Q22006
Q22007
Q22008
Q22009
Q22010
Under $5 m $5 - $25 m $25 - $50 m $50 - $100 m $100 m+
SECTORAL BREAKDOWN – Q2 2010
Exhibit 22: Top 5 Sectors by Deal Value ($ mn) in Q2 2010
Exhibit 24: Top 5 Sectors by Deal Volume in Q2 2010Exhibit 23: Sector Summary
MERGERS & ACQUISITION
18
Sector Volume Value Average Deal SizeConsumer Discretionary 30 326 25Consumer Staples 16 648 59Energy 5 1,766 441Financials 20 3,351 479Health Care 17 3,752 469Industrials 23 390 39Information technology 38 469 34Materials 20 1,849 231Telecommunication Services 6 11,994 2,399Utilities 7 226 75
Telecommunication
Services, $ 11,994
Healthcare, $ 3,752
Financials , $ 3,351
Materials, $ 1,849
Energy , $ 1,766
Information Technology, 38
Consumer Discretionary, 30
Industrials, 23
Financials , 20
Materials, 20, 0
Telecommunication Services, Healthcare and Financials werethe most targeted sectors for acquisitions with deals worth$11.9 billion, $3.8 billion and $3.4 billion respectively. Together,they accounted for 77% of total M&A deal value during thequarter.
The most active sectors in terms of deal volume was InformationTechnology with 38 deals in the quarter, followed by ConsumerDiscretionary and Industrials with 30 and 23 deals respectively. Othersectors contributing to the deal volume were Materials & Financialswith 20 deals each.
MERGERS & ACQUISITIONSECTORAL BREAKDOWN
ENERGY
MATERIALS
INDUSTRIALS
CONSUMER DISCRETIONARY
Energy accounted for 2.8% of deal volume in Q2 2010. Industrials accounted for 12.7% of deal volume in Q2 2010.
Materials witnessed 25% increase in deal volume and 450% increase in deal value.
Consumer Discretionary accounted for 16.5% of deal volume in Q2 2010.
19
5
3 7
4
9
5
$1,747
$366 $474 $502
$1,173
$1,766
0
2
4
6
8
10
$0
$500
$1,000
$1,500
$2,000
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
20
13
16 25
29
23
$338$56 $87
$1,909
$751
$390
05101520253035
$0
$500
$1,000
$1,500
$2,000
$2,500
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
14
9
12
7
16
20
$1,822
$547 $578
$286 $334
$1,849
0
5
10
15
20
25
$0
$500
$1,000
$1,500
$2,000
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
12
25
13
28
32
30
$49
$637
$32
$254
$648
$326
0
5
10
15
20
25
30
35
$0
$100
$200
$300
$400
$500
$600
$700
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
MERGERS & ACQUISITIONSECTORAL BREAKDOWN
CONSUMER STAPLES
HEALTH CARE
FINANCIALS
INFORMATION TECHNOLOGY
Invested capital increased by 76.6% in Q2 2010. Consumer Staples accounted for 8.8% of deals in Q2 2010.
Deal volume increased by 70%. Invested capital increased by 245% in Q2 2010.
Financials accounted for 11% of deal volume in Q2 2010.
Invested capital increased by 123% in Q2 2010.
7
5
9 12
13
16
$13 $3
$216
$376 $367
$648
0
5
10
15
20
$0$100$200$300$400$500$600$700
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
10
14
14
11
21
20
$97 $71 $217
$819 $823
$3,351
0
5
10
15
20
25
$0
$1,000
$2,000
$3,000
$4,000
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
10
612
1210
17
$235 $240
$1,123
$410
$1,086
$3,752
0
5
10
15
20
$0
$1,000
$2,000
$3,000
$4,000
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
18
15
2228
42
38
$118
$654
$123
$243 $210
$469
0
10
20
30
40
50
$0$100$200$300$400$500$600$700
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
20
MERGERS & ACQUISITIONSECTORAL BREAKDOWN
TELECOMMUNICATION SERVICES UTLITIES
Telecommunication Services accounted for 48% of deal value in Q2 2010.
Deal volume increased by 40%. Invested capital sharply dropped in Q2 2010.
21
4
3
3
6
7
6
$791$201 $41 $403
$14,036
$11,994
0
1
2
3
4
5
6
7
8
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
1
46
5
5
7
$0 $0 $132 $37
$3,873
$2260
1
2
3
4
5
6
7
8
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Q1 Q2 Q3 Q4 Q1 Q2
2009 2010
Volume Value ($ mn)
Jaipur
Dehradun
Indore
Ahmedabad
HyderabadPuneVizag
Bhopal
Coimbatore
Cochin
Mangalore
Mysore
Surat
Baroda
Ludhiana
LucknowKanpur
Amritsar
Jalandhar
Tier II
Mumbai
Bangalore Chennai
Tier I
REGIONAL BREAKDOWN – FIRST HALF 2010
Top 5 states according to deal value
MERGERS & ACQUISITION
State Volume Value ($mn)
Maharashtra 84 14,696
West Bengal 9 3,922
Himachal Pradesh 2 3,270
Tamil Nadu 22 2,042
Delhi 19 1,720
There were 245 M&A deals with a domestictarget in the first half of 2010. Of theseMaharashtra had 84 deals with a deal valueof $14.7 billion followed by West Bengal,Himachal Pradesh, Tamil Nadu and Delhi.
22
TOP 5 DEALS IN Q2 2010
GTL Infra, Reliance Infratel Agree To A Rs 50,000Cr Deal
GTL Infrastructure Ltd. entered into an agreement to acquire tower assets of Reliance Infratel Ltd. for a price of $10.86 billion (INR 500 billion).
The combined entity will be the world’s largest independent telecom infrastructure company with 80,000 towers and over 1,25,000 tenancies.
The deal does not include the optic fibre network of over 200,000 km and related assets owned by Reliance Infratel.
Standard Chartered Bank acted as financial advisor to GTL Infra on the transaction.
MERGERS & ACQUISITION
23
S. No. Target Buyer Type Price ($ million)1 Reliance Infratel Ltd., Tower Assets GTL Infrastructure Ltd. Domestic 10,869
2 Piramal's Healthcare Solutions Business Abbott Laboratories Inbound 3,720
3 KBL European Private Bankers SA Hinduja Group India Ltd. Outbound 1,673
4 Anglo American Zinc Hindustan Zinc Ltd. Outbound 1,338
5 Infotel Broadband Services Pvt. Ltd. Reliance Industries Ltd. Domestic 1,023
The top 5 deals accounted for more than 75% of the total M&A deals in Q2 2010.
Exhibit 25: Top M&A deals in Q2 2010
KBC Sells KBL Bank To Hinduja For $1.7B
Hinduja Group India Ltd. acquired Luxembourg based KBL European Private Bankers SA for a price of $1.67 billion (INR 78.16 billion) from KBC Bank NV.
KBL European Private Bankers SA provides wealth management solutions to clients globally.
Deutsche Bank and Spencer House Partners LLP acted as financial advisors to Hinduja Group on the deal. Allen & Overy advised KBC Bank NV and Loyens & Loeff advised Hinduja Group India Ltd. on the deal.
24
Abbott To Acquire Piramal Healthcare Unit For $3.72B
Abbott Laboratories entered into a definite agreement to acquire the healthcare solutions business of PiramalHealthcare Ltd. for a price of $3.72 billion (INR 174 billion).
The buyer will make an upfront payment of $2.12 billion and will pay $400 million annually over four years.
The assets to be transferred includes the company's manufacturing facilities at Baddi, Himachal Pradesh and rights to approximately 350 brands and trademarks.
Luthra & Luthra and Baker & McKenzie advised Abbott Laboratories and Crawford Bayley and Stephenson Harwood advised Piramal Healthcare on the deal
MERGERS & ACQUISITIONTOP 5 DEALS IN 2010
Reliance Industries acquires 95% in Infotel Broadband Services for $1B
TOP 5 DEALS IN 2010MERGERS & ACQUISITION
25
Vedanta acquired Anglo American Zinc for a price of $1.33 billion
Vedanta Resources entered into an agreement to acquire Anglo American's entire zinc business in Ireland and Africa for $1.33 billion (INR 60.67 billion).
The deal will be done through Vedanta's group company, Hindustan Zinc and includes the 100% owned Skorpionmine in Namibia, Lisheen mine in Ireland and the 74% owned Black Mountain Mining.
A&L Goodbody, Lazard & Co., Dewey & LeBoeuf and Corpus Legal Practitioners advised Hindustan Zinc and Linklatersadvised Anglo American on the deal.
Reliance Industries Ltd. entered into a definite agreement to acquire 95% stake in Mohali based Infotel Broadband Services Pvt. Ltd. for a price of $1 billion (INR 48 billion).
The company provides internet broadband services to customers using WI-MAX as access technology.
Infotel Broadband Services won pan India broadband wireless access spectrum license for 22 circles for around $2.73 billion (INR 128 billion).
2010 YTD
0
100
200
300
400
500
600
2005 2006 2007 2008 2009 2010*
314
422
561547
453
367
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
2005 2006 2007 2008 2009 2010*
$8,107
$26,389
$36,153
$27,901
$16,252
$48,075
MERGERS & ACQUISITION
Exhibit 28: M&A Sectoral Breakdown First Half 2010
Exhibit 26: M&A Deal Value First Half 2010 Exhibit 27: M&A Deal Volume First Half 2010
26
M&A’s in the first half of 2010, have reached $48.1billion as compared to $16.25 billion in 2009 and$27.9 billion in 2008. Some big tickets dealsincluding the acquisition of the tower assets ofReliance Infratel by GTL and Bharti’s buyout of theAfrican operations of Zain helped the deal valuetouch an all time high.
Deal volume in the first half of 2010 was 367 ascompared to 453 in the whole of 2009.
Telecom, Healthcare and Financials have seen thehighest deal value this year.
0
10
20
30
40
50
60
70
80
90
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Value ($ mn) Volume
6,000 DealsVenture Capital, Private Equity, M&A and Exits
3,000 Private Company FinancialsPrivate equity funded, M&A targets and many more
10,000 CompaniesProfile, Transaction, Financials, Relationships
Public Company ComparablesEV/EBITDA, EV/EBIT, EV/PAT, EV/Revenue
Public Company FinancialsKey financial highlights of all Indian listed companies.
Enhanced Industry Classification10 Sectors, 24 Industry Groups, 68 Industries and 154Sub-Industries.
Powerful ScreenerScreen deals or companies on any data point includingfinancials.
IntelligenceKeep a close tab on deals in the market.
Proprietary DataSee deals and data not available anywhere else.
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