Mergers and Acquisitions

Incorporate finance, mergers, and acquisitions (M&A) are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities, through various types of financial transactions including exchange or entity's stock, equity interests, assets, consolidations, joint ventures, slump sales, and management acquisitions.

What are different kinds of mergers that can be successfully carried out in the Indian financial ecosystem:

Mergers can be carried out in numerous ways based on the relationship between the two companies involved in the deal; Following are the kind of mergers that are mostly carried out:

Horizontal merger: Two companies that are in direct competition and share the same product lines and markets.

Vertical merger: A customer and company or a supplier and company. Think of an ice cream maker merging with a cone supplier.

Congeneric mergers: Two businesses that serve the same consumer base in different ways, such as a TV manufacturer and a cable company.

Market-extension merger: Two companies that sell the same products in different markets.

Product-extension merger: Two companies selling different but related products in the same market.

Conglomeration: Two companies that have no common business areas.

Mergers may also be distinguished by following two financing methods, each with its own ramifications for investors.

Purchase mergers

As the name suggests, this kind of merger occurs when one company purchases another company. The purchase is made with cash or through the issue of debt instruments.

Consolidation mergers

With this merger, a brand-new company is formed, and both companies are bought and combined under the new entity.

Acquisition

An acquisition/takeover is the purchase of an existing business or a registered company by another business entity. Specific acquisition targets are generally identified by market research, trade expos, internal business units, or supply chain analysis by promoters/ board of the acquirer entity in order to scale up their business for commercial benefits or merely to make investments in profitable ventures.

Such acquisitions may involve purchasing 100% or lesser stakes in the assets or ownership rights of the target entity.

A business entity may decide to evaluate M&A for a variety of reasons:

• Impending strategic challenges that may require strategic partners
• Potential (or actual) third-party interest from possible acquirers
• The desire of the shareholders to diversify or monetize their investment
• The natural organic evolution of the business (e.g., reaching a plateau)
• Need for more capital to reach the next milestones in the industry
• Compelling synergies that may become available after a business amalgamation
• Change in the marketplace regarding the valuation of comparable businesses
• Life cycle / estate planning / tax / partnership considerations (for individuals owners or for fund sponsors)

A successful M&A transaction, whether through an acquisition, a merger, or a joint venture, can be a key to unlock the true potential of a company, or to make a quantum leap and attain a greater level of profitability and success.

How can SSI facilitate mergers and acquisitions for you?

SSI along with its board of directors and promoters have substantial experience in various industrial domains in India which indeed brings a lot of traction to facilitate any business entity looking to either acquire a profitable business or sell its own stake in order to raise investment or to disinvest their ownership rights.

No matter the phase of the deal lifecycle you are targeting; SSI’s vast and trusted corporate data and essential analytical skills can help you find valuable investors, partners, and profitable amalgamations.

Bringing synergies through M&A, or carving them out through de-mergers and divestitures, are one of the most significant decisions that an organization plans to undertake in its operational life cycle. Where transformational results from a successful transaction can be game-changing, there is always a greater risk involved with underperformance or failure.

Therefore, when the stakes are this high, there is enough ground to not leave anything to luck.

Hence, with highly experienced M&A professionals, SSI can be your quintessential strategic partner and help you evaluate corporate buyers, private equity investors, venture capitalists, and provide a diversified range of services and solutions to address your integration, consolidation, and separation needs throughout the lifecycle of the transaction.