In April, 129 M&A and PE deals amounted to Rs 9,800 crore.
Last month was the best one in a long while for mergers and acquisitions, as well as private equity deals.
In April, 129 M&A and PE deals (including qualified institutional placement deals) amounting to $2.2 billion (Rs 9,800 crore) were reported. This has been the highest number of deals in any month in the past five years.
In all, during the first four months of 2010, as many as 380 deals were reported, amounting to a total of $21.7 billion, the best in this period compared to the previous two years. Experts see the higher number of deals as evidence of consolidation in domestic industry.
Out of 89 M&A deals, 58 have been domestic ones, an indication of a higher level of consolidation among small and mid-size companies.
C G Srividya, partner, Specialist Advisory Services, at the global accounting firm of Grant Thornton, feels that “looking at the pipeline, consolidation will continue for some more time. However, average deal size has been small. In terms of overall deals, more and more will happen, as companies have been seen taking advantage of inorganic growth opportunities.”
According to Grant Thornton, April 2010 saw unprecedented deal volume, with 89 M&A deals being announced.
While there have not been any billion-plus dollar deals, the deal value has been more than double than that of the same period last year. Compared to the past few months, there have been significantly higher numbers of domestic deals.
Srividya said, “We are also seeing considerable interests in some atypical sectors such as agro products, education, FMCG, chemicals, etc, where more deals are happening.”
| DEAL SUMMARY | ||||||
| April | Volume | Value ($ mn) | ||||
| 2008 | 2009 | 2010 | 2008 | 2009 | 2010 | |
| Inbound | 9 | 3 | 8 | 408 | 44 | 51 |
| Outbound | 23 | 5 | 23 | 626 | 32 | 483 |
| Total Cross Border | 32 | 8 | 31 | 1,034 | 76 | 533 |
| Domestic | 10 | 13 | 58 | 92 | 351 | 310 |
| Total M & A | 42 | 21 | 89 | 1,126 | 427 | 844 |
| PE (incl. QIP) | 32 | 18 | 40 | 563 | 596 | 1,365 |
| Grand total | 74 | 39 | 129 | 1,689 | 1,023 | 2,209 |
| Source: Grant Thornton | ||||||
Adding: “According to the data, private equity deal momentum has significantly increased as well. The number of deals for the month is much higher than what we have seen in more than two years. The deal value for April 2010 has been higher than in the same period for the past three years.
There have been seven deals valued at over $50 million, including three pure-play PE (non-QIP) deals.”
