M&A, PE DEALS CROSS $5.57-B MARK IN AUGUST, 2008

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After a quiet July, dealstreet was again buzzing with action in August. The total value of mergers and acquisitions (M&A) and private equity (PE) deals during the month is pegged at more than $5.57 billion against a mere $1.23 billion in July’08. Though this has largely to do with large M&A transactions, even PE deal value jumped almost 50%.

While the number of M&A transactions actually dropped compared to July, the total value of deals rose sharply month-onmonth. The total number
of M&A deals announced during August stood at 31 with an announced value of $4.63 billion against 43 deals amounting to $580 million during July 2008, according to the latest dealtracker of advisory firm Grant Thornton.

Among the top M&A deals during the month was ONGC’s acquisition of Imperial Energy Plc followed by Infosys Technology’s announcement to acquire UK based Axon and CBay Systems deal for MedQuist.

In total, there were nine domestic deals where both the acquirer and the target were Indian firms, with an announced value of $80 million. In addition there were 22 cross-border M&A deals with an announced value of $ 4.55 billion. Out of this, 17 were outbound deals worth $4.48 billion involving Indian companies acquiring business overseas and five were inbound deals where multinational firms picked stake in domestic companies for $ 80 million. This takes the total value of M&A deals during the first eight months of 2008 to $22.74 billion spread over 346 transactions. During the same period last year India Inc had recorded 456 deals amounting to $ 48.23 billion. However, this value was skewed due to the three multi-billion dollar deals: Tata-Corus, Vodafone-Hutch Essar and Hindalco-Novelis.

While M&A deals jumped in value even with fewer transactions, PE deals managed to grow during August in both volume and value terms compared to July.

There were 31 PE deals during the month with an announced value of $ 944 million as against 29 deals amounting to $ 650 million in July.

The sectors where PE firms were most active last month include pharma, healthcare & biotech, real estate & infrastructure management besides IT & ITeS. The three top PE transactions included MPC Synergy’s deal with Phoenix Mills, Baring Private Equity Asia- RSP Architects & Planners besides Oman Investment Fund picking a minority stake in Quippo Telecom.

This takes the total number of PE deals during the January-August’08 period to 246, with an announced value of $ 8.69 billion as against 260 deals worth $ 10.74 billion during the corresponding period in 2007.

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