Manufacturing deals lead M&A activity higher in April
However, M&A deal volume in April was down to 44 deals as compared to 60 deals in the previous year
Mumbai: The value of deals (including mergers and acquisitions and private equity) rose 51% to $5.53 billion (across 107 deals) in April compared to a year ago on the back of larger transactions and increased activity in manufacturing, according to Grant Thornton India LLP’s deal tracker report.
M&A deal value grew to $3.64 billion in April compared to $1.66 billion in the same period last year. The rise in M&A activity was driven by domestic transactions worth $3.34 billion (across 29 deals), especially in the highly leveraged manufacturing sector where large corporate houses have put several of their assets on the block in an effort to reduce balance sheet stress.
The manufacturing sector contributed around 66% of total deal value in the month led by UltraTech Cement Ltd’s acquisition of Jaiprakash Associates Ltd cement assets for $2.37 billion.
Bharti Airtel Ltd’s acquisition of Aircel’s 4G spectrum rights in eight telecom circles for $525 million and HCL Technologies Ltd’s acquisition of IT services firm Geometric Ltd for $190 million were the other notable deals in the month.
“The overall M&A market witnessed a significant upsurge this month with a $2 billion transaction and two deals worth over $100 million. Domestic M&A deals saw a steep hike, predominantly on account of Ultratech Cement’s $2.4 billion acquisition of Jaiprakash Associate’s cement business," the report said.
However, M&A deal volume in April was down to 44 deals as compared to 60 deals in the previous year.
Private equity (PE) investments in the month of April witnessed a decline both in deal volume and value, the report said.
PE deal value was down to $1.88 billion (across 63 deals) as compared to deals worth $1.99 billion (across 89 deals) in the same period last year.
Blackstone Group LLP’s $827 million purchase of a majority stake in IT services firm Mphasis Ltd; Fairfax India Holdings Corp.’s $300 million investment in Sanmar Chemicals Group and a $210 million investment in small finance bank licensee Janalakshmi Financial Services Pvt Ltd by a consortium of investors led by TPG Capital comprised the top three PE deals in April.
“The thrust of both M&A and PE investments of $2.7 billion in the manufacturing sector is both encouraging and crucial for the overall growth of the economy and thus the deal trends," said Prashant Mehra, partner at Grant Thornton India.
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