Dealtracker | Q1 - 2015

We are pleased to present Grant Thornton Dealtracker Report for first quarter of 2015 (January – March). As we enter into the 11th year of publishing this document, we want to thank the readers for their continued support and feedback.

We  ended the year 2014 on a high note, with the new government at the Centre promising to be business friendly, renewing the optimism among business leaders. This was reflected in a significant pickup in deal momentum, post the Lok Sabha elections. We continue to see this momentum building up further in 2015.

Overall, the first quarter witnessed deals worth US$ 8.2 billion (350 deals),  as against US$ 6.4 billion (257 deals) in 2014 and US$ 6.5 billion (220 deals) in 2013, which shows a significant surge both in terms of values and volumes. We continued to see active inbound interest in Indian businesses and consolidation among domestic businesses.  The e-commerce sector is showing significant activity and seems to be on ‘steroids’ in terms of deal-making, investments and innovation.

In its maiden full-year Union Budget presented in February, the government renewed its commitment on fiscal consolidation and set out its goal to boost economic growth and increase infrastructure spending. The Budget also emphasised on the importance of manufacturing in India. Going forward, we  can hope to see more investments for manufacturing in core sectors. The Technology and Pharma sectors has always significant action in terms of deal making and this is expected to continue. We are geared up for an active year in deal-making and look forward to take our readers through this exciting journey in the months to come. – Harish HV, Partner, Grant Thornton India LLP

Overall deal activity in the first quarter of 2015 (Q1-2015) stood at US$ 8.2 billion (350 deals), up 36% in terms of volume and 27% in terms of value over first quarter of 2014 (Q1-2014). M&A values increased by 26% mainly due to strong inbound interest and an active domestic market where large players are looking at consolidation to establish leadership position in select markets.

PE investment in Q1-2015 witnessed 30% increase in deal value and 67% increase in deal volume against Q1-2014 with four deals worth over US$ 100million each and over eight deals worth over US$ 50million each in the quarter. PE volumes have steadily been increasing and now contribute more than 50% to overall deal volumes, thus surpassing M&A.

There were 40 PE exits during the quarter, and we expect many more in the months to come as PEs have remained invested for a considerable time in most investments in the country and are eagerly awaiting exits through trade sales and consolidation in key sectors.

The IT&ITeS and Pharma/Healthcare sectors dominated both M&A and PE deal activity. E-commerce continued to garner multi million dollar investments coupled with big ticket consolidations amongst players. In Pharma, we saw Mylan picking up select businesses of Famy Care for US$ 750million putting the spotlight on India’s generics segment.

Notable strategic deals during the quarter were Harman International Industries-Symphony Teleca Corporation (US$ 780million), Alibaba Group- One97 Communications Ltd (US$ 575 million) and key PE investments during the quarter were TPG Capital’s investment into Manipal Health Enterprises (US$ 150million), and Equis Funds Group’s investment in Assetz Property (US$116million).

Given the strong Q1 activity and a positive macro-economic environment, we expect an exciting year of deals and more importantly, a healthier and encouraging corporate environment. – Prashant Mehra, Partner, Grant Thornton India LLP

Write to us at contact@in.gt.com for a copy of the report.