CHAPTER 1 Industry Profile (Investment Banking and Mergers A!

"uisition#

1$1Investment Banking%
Investment Banking can be defined to encompass many activities Definition Usually Involves At Least: Underwriting and Distributing ew !ecurity Issues "ffering Brokerage !ervices to #ublic $ Institutional Investors #roviding %inancial Advice to &orporate &lients' (specially "n !ecurity Issues' )$A Deal #roviding %inancial *esearc+ to Investors' &orporate &ustomers )arket,)aking in #articular !ecurities

1$&'vervie(%
Investment banks are c+anging fast- %orty years ago t+e industry was dominated by a few small partners+ips t+at made t+e bulk of t+eir income from t+e commissions t+ey earned floating securities on be+alf of t+eir clients- .oday/s investment banks are +uge full,service firms t+at make a substantial proportion of t+eir revenues in tec+nical trading businesses t+at started to attain t+eir current prominence only in t+e 0123s- .+e &#I,ad4usted capitali5ation of t+e top ten investment banks soared from 60 billion in 0173 to 6018 billion in 9333Between 01:1 and 9333' t+e number of professionals employed by t+e top five investment banks ;ranked by capitali5ation< rose from =7'333 to 93='333-

1$)Ma*or C+anges To T+e Investment Banking Industry ,in!e 1-./

Ma*or C+anges Began In 0, In Early11-./s After DL>/s 01:3 I#"' )ost %irms ?ent #ublic &ollapse "f Bretton ?oods' *ise "f "#(& In 01:@ Increased Aolatility In %inancial )arkets (*I!A "f 01:8 )andated #rudent )an *ule %or #ension %und )anagers )ay Day 01:= *epeal "f %iBed &ommissions

 C+anges A!!elerated In 1-2/s% *ule 80= ;!+elf *egistration< Adopted In 0129 ?ave "f )ergers And &onsolidation International Ca3ital Markets Began To 4ro( 5ramati!ally ,+ortly After 0, Markets% UC )arkets #ropelled by #rivati5ations' Big Bang #rivati5ations' &ompetition' Deregulation Also boosted ot+er (uropean )arkets International #D% Investment Began In 0123s'!urged In 0113s ((& $ (U )arket Integration Initiatives Development "f ED* In 0113 %or (Fuity "ffers

1$6

T+e ten largest investment 7anks as of 8une9 &/1)9 are as follo(s %(Ta7le 1 #
&+ange in %ees G of %ees collected by product in %irst Half of 930@ ;6m<vs- #rev- #eriodI 9'2:7-30;J07G< 9'=29-99;J9:G< 9'@99-88;J91G< 9'38=-=8;J9@G< 0'182-=3;J99G< 0'788-=2;J90G< 0'=11-:9;J03G< 0'=@0-@3;,9G< 0'3=3-@=;J91G< 129-20;J03G< @:'829-13;J2G< )$A 07 02 @0 9: 90 01 00 02 2 90 97 (Fuity 98 90 @3 @9 98 93 9@ 92 01 @= 90 @8 @@ 9: @0 @: @= 88 @0 80 @3 @0 Bonds 97 92 09 03 02 97 99 9@ @9 08 99 Loans

%ees .op 03 Banks ># )organ Bank of America )errill Lync+ Eoldman !ac+s )organ !tanley &iti Barclays Deutsc+e Bank &redit !uisse ?ells %argo UB! .otal

1$:T+e Indian Investment Banking Industry%

2

.+e Indian Investment Banking scene is dotted wit+ investment banks of t+e middle market variety- In fact' international bulge brackets +ave been reluctant to set up a strong investment banking presence in India primarily because large transactions in t+e country do not +appen often enoug+ to warrant t+at kind of presence- Bulge bracket investment banks +aving functional front,office presence in )umbai are Bank of America )errill Lync+' &itigroup and ># )organ- UB!' Barclays' &redit !uisse' etc all +ave a presence in India in t+e retail banking sector only- Eoldman !ac+s and a few ot+er banks +ave a presence in India in t+e back,office part of t+e value c+ain onlyInvestment banking in India is still confined to simple investment banking productsInvestment banking products t+at commonly seen are financing for pro4ect finance in t+e form of debt and eFuity- In fact' t+e investment banking industry in India is concentrated in t+ree ma4or segments: (a# E"uity ,yndi!ation ; Pla!ement% !imply put' it t+e process of finding sponsors to subscribe to a company/s eFuity- .+ese investments may be made by strategic investors ;ot+er corporate< or by #( firms operating in India- Issuing eFuity in t+e form of I#"s is a cumbersome process and is a trade skill mastered by a few investment banking players(7# 5e7t ,yndi!ation ; Pla!ement% Like eFuity syndication' t+is is t+e process of funding investors w+o take a lien on t+e assets of t+e borrowing company- .+is could be for regular debt or even sub,debt D me55anine lending- In t+is case t+e investment bank arranges for a t+ird party ;like a #!U bank or an B%&< to take on t+e debt' t+erefore it assumes none of t+e risk of t+is debt investment(!# ,tru!tured <inan!e% Hig+,yield lending: Investment banks lend off t+eir own balance s+eet- !ince t+ey/re lending off t+eir own balance s+eet' t+ey assume t+e risk of t+e investment-

1$=Mergers

A!"uisition%

)ergers and acFuisitions ;abbreviated )$A< is an aspect of corporate strategy' corporate finance and management dealing wit+ t+e buying' selling' dividing and combining of different companies and similar entities t+at can +elp an enterprise grow rapidly in its sector or location of origin' or a new field or new location' wit+out creating a subsidiary' ot+er c+ild entity or using a 4oint venture-

1$.'vervie(%
)$A +ave played an important role in t+e transformation of t+e industrial sector of India since t+e !econd ?orld ?ar period- .+e economic and political conditions during t+e !econd ?orld ?ar and postwar periods ;including several years after independence< gave rise to a spate of )$As- .+e inflationary situation during t+e wartime enabled many Indian businessmen to amass income by way of +ig+ profits and dividends and black money ;Cot+ari 017:<- .+is led to Kw+olesale infiltration of businessmen in industry during war period giving rise to +ectic activity in stock eBc+anges.+ere was a cra5e to acFuire control over industrial units in spite of swollen prices of s+ares.+e practice of cornering s+ares in t+e open market and trafficking of managing agency rig+ts wit+ a view to acFuiring control over t+e management of establis+ed and reputed companies +ad come prominently to lig+t- .+e net effect of t+ese two practices' vi5 of acFuiring control over owners+ip of companies and of acFuiring control over managing agencies' was t+at large number of concerns passed into t+e +ands of prominent industrial +ouses of t+e country ;Cot+ari' 017:<As it became clear t+at India would be gaining independence' Britis+ managing agency +ouses gradually liFuidated t+eir +oldings at fabulous prices offered by Indian Business community- Besides' t+e transfer of managing agencies' t+ere were a large number of cases of transfer of interests in individual industrial units from Britis+ to Indian +ands- %urt+er at t+at time' it used to be t+e fas+ion to obtain control of insurance companies for t+e purpose of utili5ing t+eir funds to acFuire substantial +oldings in ot+er companies- .+e big industrialists also floated banks and investment companies for furt+erance of t+e ob4ective of acFuiring control over establis+ed concerns.+e post,war period is regarded as an era of )$As- Large number of )$As occurred in industries like 4ute' cotton teBtiles' sugar' insurance' banking' electricity and tea plantation- It +as been found t+at' alt+oug+ t+ere were a large number of )$As in t+e early post independence period' t+e anti,big government policies and regulations of t+e 0173s and 01:3s seriously deterred )$As- .+is does not' of course' mean t+at )$As were uncommon during t+e controlled regime- .+e deterrent was mostly to +ori5ontal combinations w+ic+' result in concentration of economic power to t+e common detriment- However' t+ere were many conglomerate combinations- In some cases' even t+e Eovernment encouraged )$AsL especially for sick units- %urt+er' t+e formation of t+e Life Insurance &orporation and nationali5ation of t+e life insurance business in 01=7 resulted in t+e takeover of 98@ insurance
4

companies- .+ere was a similar development in t+e general insurance business- .+e national teBtiles corporation ; .&< took over a large number of sick teBtiles units ;Car 9338<-

1$2Re!ent Trend in M A%
)$As as a strategy employed by several corporate groups like *-#- Eoenka' Ai4ay )allya and )anu &++abria for growt+ and eBpansion of t+e empire in India in t+e eig+ties- !ome of t+e companies taken over by *#E group included Dunlop' &eat' #+ilips &arbon Black' Eramap+one India- )allyas United Breweries ;UB< group was straddled mostly by )$As%urt+er' in t+e post liberali5ation period' t+e giant Hindustan Lever Limited +as employed )$A as an important growt+ strategy.+e A4ay #iramal group +as almost entirely been built up by )$As- .+e sout+ based' )urugappa group built an empire by employing )$A as a strategy- !ome of t+e companies acFuired by )urugappa group include' (ID #arry' &oromondol %ertili5ers' B+arat #ulverising )ills' !terling Abrasives' &ut %ast Abrasives etc"t+er companies and groups w+ose growt+ +as been contributed by )$As include *anbaBy Laboratories Limited and !un #+armaceuticals Industries particularly during t+e later +alf of t+e 0113s- During t+is decade' t+ere +as been plet+ora of )$As +appening in every sector of Indian industry- (ven' t+e known and big industrial +ouses of India' like *eliance Eroup' .ata Eroup and Birla group +ave engaged in several big deals.+e volume of )$A transactions in India +as apparently increased to about 7:-9 billion U!D in 9303 from 90-@ billion U!D in 9331- At present t+e industry is witnessing a w+opping 9:3G increase in )$A deal in t+e first Fuarter of t+e financial year- .+is increasing percentage is mainly attributed to t+e increasing cross,border )$A transactions- "ver t+at increasing interest of foreign companies in Indian companies +as given a tremendous pus+ to suc+,transactionsLarge Indian companies are going t+roug+ a p+ase of growt+ as all are eBploring growt+ potential in foreign markets and on t+e ot+er end even international companies is targeting Indian companies for growt+ and eBpansion- !ome of t+e ma4or factors resulting in t+is sudden growt+ of merger and acFuisition deal in India are favorable government policies' eBcess of capital flow' economic stability' corporate investments' and dynamic attitude of Indian,companies.+e recent merger and acFuisition 9300 made by Indian companies worldwide are t+ose of
5

.ata !teel acFuiring &orus Eroup plc' UC based company wit+ a deal of U! 609'333 million and Hindalco acFuiring ovelis from &anada for U! 67'333 million-

?it+ t+ese ma4or mergers and many more on t+e annual c+art' )$A services India is taking a revolutionary form- &reating a nic+e on all platforms of corporate businesses' merger and acFuisition in India is constantly rising wit+ edge over competition-

1$-

Ma*or M A(Ta7le &#

Transa!tion value (in 0,5 939'333'333'333 13'333'333'333 ::'933'333'333 :@'333'333'333 7@'333'333'333 73'333'333'333 =@'@73'333'333 =@'333'333'333 82'333'333'333 89'333'333'333

.op 03 )$A deals worldwide by value ;in mil- U!D< from 0113 to 0111
Rank 0 9 @ 8 = 7 : 2 1 03 >ear 0111 0111 0112 0112 0111 0111 0112 0112 0111 011: Pur!+aser Aodafone Airtouc+ #L&M@3N #fi5erM@0N (BBonM@9NM@@N &iticorp !B& &ommunications Aodafone Eroup Bell AtlanticM@8N B#M@=N Owest &ommunications ?orldcom Pur!+ased )annesmann ?arner,Lambert )obil .ravelers Eroup Ameritec+ &orporation Air.ouc+ &ommunications E.( Amoco U! ?(!. )&I &ommunications

.op 03 )$A deals worldwide by value ;in mil- U!D< from 9333 to 9303
Rank 0 9 @ 8 >ear 9333 9333 9338 9337 Pur!+aser Fusion: A"L Inc;America "nline<M@7NM@:N ElaBo ?ellcome #lc*oyal Dutc+ #etroleum &ompany A.$. Inc-M@2NM@1N Pur!+ased .ime ?arner !mit+Cline Beec+am #lcP!+ellP .ransport $ .rading &oBell!out+ &orporation Transa!tion value (in 0,5 078':8:'333'333 :='170'333'333 :8'==1'333'333 :9'7:0'333'333

= 7 : 2 1 03

9330 9331 9333 9339 9338 9332

&omcast &orporation #fi5er IncSpin-off: ortel etworks &orporation #fi5er Inc>#)organ &+ase $ &oM83N

A.$. Broadband ?yet+

:9'380'333'333 72'333'333'333 =1'1:8'333'333

#+armacia &orporatio n Bank "ne &orporation An+euser,Busc+ &om panies' Inc-

=1'=0='333'333 =2':70'333'333 =9'333'333'333

InBev Inc-

"t+er notable )$A deals from 9303 to 930@ include

>ear 9300 9300 9300 9309 930@ 930@

Pur!+aser Eoogle )icrosoft Berks+ire Hat+away Deutsc+e .elekom !oftbank Berks+ire Hat+away

Pur!+ased )otorola )obility !kype Lubri5ol )etro#&! !print &orporation H- >- Hein5 &ompany

Transa!tion value (in 0,5# 1'233'333'333 2'=33'333'333 1'993'333'333 91'333'333'333 90'733'333'333 92'333'333'333

CHAPTER & Com3any Profile (4lo7al Mergers#

4lo7al Mergers :./9 1=t+ ?B? Cross9 )rd ?A? Main =t+ ,e!tor9 H,R @ay 'ut Bangalore :=/ 1/& P+one% /2/ 6/--):&: Mo7ile% --6 ::- 2/-) ((($glo7almergers$in &$1A7out Com3any%
Elobal )ergers born out a belief t+at todayQs entrepreneurs +ave an urgent need for capital and prudent business advice in order to take advantage of bot+ domestic and international markets- IndiaQs domestic economy is rapidly eBpanding into one of t+e largest in t+e world(ntrepreneurs operating in India +ave t+e potential to create multimillion dollar companies over t+e neBt five years- "ur aim is to +elp t+ese entrepreneurs grow t+eir businesses into tomorrowQs market,leadersElobal mergers is passionately committed to raise t+e capital w+ic+ will +elp to t+e entrepreneurs' and business owners to develop better products and services wit+ cutting edge tec+nology w+ic+ in turn will improve t+e lives of millions of people across t+e globeElobal )ergers comfortably positioned to +elp our clients t+roug+ industry knowledge and strong network in t+e industry-

&$&A33roa!+%
9

Elobal mergers uniFue and innovative approac+ in t+e capital market and )$A +elp t+eir clients to eBpect +ig+est Fuality of service on time t+at results in t+e total customer satisfactionElobal )ergers is committed to building long term relations+ips wit+ clients rat+er t+an providing a s+ort term' transaction,driven solution- &ompany maintains confidentiality at all t+e stages-

&$)Mission%
Elobal )ergers is passionately committed to *aising &apital w+ic+ will +elp entrepreneurs' and business owners to develop better product and services wit+ cutting edge tec+nology w+ic+ in turn will improve t+e lives of millions of people across t+e Elobe-

&$6Aision%
&ompany/s goal is to serve 033 customers' raise over one billion dollar capital and close deal wort+ of =33 million dollar in five years-

&$:Aalues%

10

Integrity:

&ompany value its client/s confidentiality' sensitivities and +andle client/s data and information in same way t+at company +andles its own information-

&ommitment: &ompany is dedicated to deliver w+at company promise"n time: &ustomer !atisfaction: &ompany makes sure t+ey are wit+ client till t+e end until client is completely satisfied wit+ its service&ompany spend considerable amount of time up front in planning so t+at company can deliver its service on time or a+ead of time-

&$=Com3any Poli!y%
&ompany respects eac+ individual/s rig+t to personal privacy' &ompany committed to protecting client/s privacy- .+e information t+at client provide is solely used for carried out t+eir business interest-

&$.@eaders+i3%
Mr$ Ravi B$4o(da <ounder C$E$'$

)r- Eowda is a founder and +as over twenty years of management and entrepreneurial eBperience in U!A and India- He started +is carrier wit+ A.$. Bell Labs in U!AL managed various software and Fuality initiative pro4ects for about ten years- .+en +e started +is own
11

company Elobal Associates' Inc- in U!A' offered I. services to many fortune =33 companies- After successfully running t+e company for about 03 years' +e sold t+e company to a %lorida based company- !ince t+en +e +as added few more companies to +is portfolio' and been an advisor to some)r- Eowda is member of &(" &lub India' &("D &I"D&"(D&""D&%"DHeadDA#D DirectorD#resident Level , !enior Leaders+ip Eroup' and .+e Indus (ntrepreneurs ;.i(< Mr$Anil 5C,ouDa 5ire!tor Business Aaluation

Anil DQ!ou5a' &+artered accountant' w+o +as been in area of consulting for last 2 years on taB matters' introduction of systems $ controls in corporate sector' Business Aaluations' Due diligence for business acFuisitions and mergers- Before commencement of consulting profession' +ad been working for well know ) & company as +ead of finance department-

CHAPTER ) 'rganiDational Hierar!+y

)$1'rganiDational C+art

C$E$'$

12
SourcingMarketing Dealing Blind/Digital/T arget Bu <inan!e ine 5e3artment Marketing !aluation "inancial 5e3artment #nal$ i %ro&ect Analysis 5e3artment #nal$ i '()(S*eciali t H$R$ 5e3artment

)$&,ervi!e Profile%
Elobal )ergers provides independent advice to corporations' partners+ip firms' institutions and individuals on *aising &apital )ergers $ AcFuisitions &orporate Advisory

&ompany/s focus is on )id,)arket companies w+o +ave carved a nic+e for t+emselves and became leaders in t+eir fieldElobal )ergers motto is to +elp one client at a time to scale up to neBt level-

)$&$1 CAPITA@ RAI,IE4%

13

&ompany assists t+eir clients in eFuity funding and debtDcollateral funding- &ompany +as close association wit+ several #(s' A&s' AIs' and H Is &ompany also +as good relations+ip wit+ banks for debtDcollateral funding- ?+atever your financial needs are' we can +elp you- &ompany/s eBtensive relations+ips enable t+em to assist client in finding t+e rig+t capital partner t+at will s+are t+eir goal of continues grown and success- )ost importantly company can +elp client find a partner w+o understands t+e key c+allenges company facing in todayQs rapidly c+anging environment- &ompany assists bot+ in eFuity and debt funding-

E"uity <unding%

14

?+at Investors Look %or: 0- A clear description of t+e problem t+at your business is trying to solve in t+e market 9- #otential for Hig+ Erowt+ @- !ustainable competitive advantage 8- %inancial *eturn "n t+eir Investment ;*"I< =- An eBperienced management team ?+at Elobal )ergers offer: 0- Ability to understand t+e clientQs funding need and map it to rig+t funding companies9- &lear understanding of funding companies processes@- !trong network wit+ funding companies-

5e7t <unding%

15

?+at Banks look for: 0- @ years audited Balance !+eet wit+ income taB returns9- Detailed #ro4ect *eport@- #romoters eBperience in +andling similar pro4ects8- Aalue of &ollateral =- !ource for making mont+ly mortgage payment ?+at Elobal )ergers offer: 0- ?e understand w+at banks and financial institutions look for to fund clients9- Ability to clearly map clients needs to financial institutions reFuirements@- !trong network and good relations+ip wit+ financial institutions-

)$&$& MER4ER,

ACF0I,ITI'E%

16

&ompany advices clients on all stages of )ergers $ acFuisition ;)$A<' from t+e initial p+ase of defining strategy to successfully closing to deal' &ompany advices on valuation' eBecute t+e deal on timely basis and +elp client get t+e optimum value for business-

?+at Buyers Look %or: 0- !trong )anagement .eam 9- Diverse &ustomer Base @- !uccessful .rack *ecord 8- &lean Legal and Insurance +istory =- *easonable (Bpectation ?+at Elobal )ergers offer: 1( Ability to find t+e buyer t+ruQ our professional marketing 9@(Bceptional negotiation skills!tructure t+e deal so t+at it creates win,win situation-

)$&$)

C'RP'RATE A5AI,'R>%
17

Eap analysis +elps companies compare actual performance wit+ potential performance- At its core are two Fuestions: ?+ere are weR ?+ere do we want to beR

If our company and organi5ation does not make t+e best use of current resources' or forgoes investment in capital or tec+nology- It may produce or perform below its potential- Elobal mergers take clients to w+ere t+ey want to be-

CHAPTER 6
18

,tudy of <un!tional 5e3artments

6$1Analysis 5e3artment%

In Elobal )ergers' Analysis team plays a vital and a very important role- )a4or decisions are taken on t+e basis of report of analysis department- Analysis department does overall analysis of a pro4ect or business plan of a client- Analysis department works wit+ coordination of financial department-

#ro4ect Analysis includes analysis of Business plan' financial data' infrastructure of client/s company etcIt also analyses t+e risk factor in client/s company.+ere are @ employees working in Analysis department-

6$1$1Analysis de3artment verified and analyses follo(ing do!uments%

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0- #ro4ect report wit+ necessary sanctioned papers 9- &ompany #rofile @- Aaluation *eport of #ro4ect8- .+ree years Income .aB return =- .+ree years Balance !+eet profit loss wit+ audit reports 7- "ne year bank statements :- Land details along wit+ purc+ase agreement ;if owned or Lease Agreement< 2- Director list $ s+are +olding pattern on company letter +ead 1- &ompany Liabilities or Loan (it+er Bank "r #rivate- #lease give details wit+ !anction letter $ Updated !tatements 03- "t+er completed or upcoming pro4ects details00- All director profile $ CS& paper 09- )"A ;)emorandum of Articles< 0@- Articles of Association 08- &ompany and directors #A card wit+ *esidence #roof In &ase of selling t+e company' analysis department analy5ing client/s situation like' ?+y t+ey want to sell Business (valuation #artial or %ully take over After analyses all documents of client/s company' Analysis department +as to prepare and send K(ngagement documentT to client for signature- (ngagement document gives aut+ority to company to use and publis+ client/s information %ollowing is t+e sample of K(ngagement DocumentT between Elobal )ergers and client-

20

( EAE()( . AE*(()( .

B(.?(( EL"BAL )(*E(*! A D AB& ;I DIA< #A.- L.DA#*IL 0=' 930@ .+is AE*(()( . is made and entered on April 0=' 930@' by and between: EL"BAL )(*E(*!' wit+ a place of business at: #artL And AB& ;I DIA< #A.- L.D- wit+ a place of business at U 9:3 India' +erein referred to as t+e V&lient/ t+e !econd #art #U*#"!(: .+e purpose of t+is letter is to set fort+ t+e terms and conditions under w+ic+ Elobal )ergers agrees to serve &lient as an advisor in assisting t+e client in raising capital from investors.(*)!: .+is agreement is valid for a period of siB mont+s and eBtended automatically for a period of siB more wit+ a mutual consento- =:3' 07t+ QBQ &ross' @rd QAQ )ain' 7t+

!ector' H!* Layout' Bangalore =73039' India' +erein referred to as Elobal )ergers t+e %irst

BU!I (!! I %"*)A.I" :

21

.+e client s+all furnis+ to Elobal )ergers complete and accurate current and +istorical business information and s+all promptly inform Elobal )ergers of any c+anges w+ic+ may materially affect its business or Elobal )ergersQ services under t+is agreement- .+e client agrees to +old Elobal )ergers and its employees +armless against any losses' claims due to misrepresentation of data by t+e client or misuse of t+e data by t+ird party or misuse of data by ot+er vendors selected by t+e client.+e client agrees to provide Elobal )ergers suc+ information as is reFuired from time to time for facilitating t+e arrangement of funds.+e client agrees and confirm t+at t+ey will not contact directly or indirectly in w+atsoever manner wit+ individuals' banks' financial institutions' private lenders or private trust funds' securities +ouses' any ot+er available sources and t+eir intermediaries and agents or brokers for t+e purpose of securing funds for t+e duration of t+is agreement.+e client agrees to sign a 4oint mandate in case t+ere is anot+er company involved in t+is )$A transaction at no additional fees to client*()U (*A.I" : .+e client agrees to pay t+e success fee as a result of t+is engagement during t+e term of agreement and siB ;7< mont+s after t+e termination of t+e agreement in case if t+e finance were to be received t+roug+ source s+ared by Elobal )ergers wit+ w+om client +ad interactions.+e client agrees to pay @-33G of t+e transaction value plus applicable taBes as service fees to Elobal )ergers wit+in 9 days of receiving funds- Any portion of t+e fee not paid on t+e due date s+all bear interest of eig+teen ;02G< percent per annum.+e client will pay 9='333 at t+e time of signing t+e mandate w+ic+ will be ad4usted towards t+e success feesIf t+e client decides not to take %unds after mont+s of +ard work between funding company and Elobal )ergers' t+e client will pay full success fees to Elobal )ergers as per t+e terms of t+is agreementIf t+e client takes funding from any ot+er Advisors ot+er t+an Elobal )ergers during t+e term of t+is agreement' t+e client will pay =3G of success fees to Elobal )ergers-

22

If t+e client decides not to work t+e Elobal )ergers during t+e term of t+is agreement' t+e client will pay @L to Elobal )ergers to cover t+e eBpenses .ravel' meal and accommodation eBpenses are paid by t+e client for .?" times only during t+e term of t+is agreement' beyond t+at said eBpenses will be paid by t+e client but will be ad4usted towards success fees- However all eBpenses are sub4ected to approval from t+e clientElobal )ergers will also assist t+e client in Business (valuation' Due Diligence' Legal formalities' closing documents' and ot+er #rocess related to raising capital#lease indicate your acceptance of t+is agreement by eBecuting and returning t+e copy of t+is letter EL"BAL )(*E(*! !ignature: ame: .itle: Date: )arc+ WWWW' 930@ WWWWWWWWWWWWWWWWW#*IA.( LI)I.(D !ignature: ame: .itle: Date: )arc+ WWWW' 930@

&")#A S !(AL

6$&<inan!e 5e3artment%

23

In finance department of a company' Analysis of financial information of client/s company +as been done- .+ere are two sub,division of finance department , Business Aaluation and %inancial Analysis-

Business Aaluation is done by )r- Anil D/!ou5a- He is &A by profession and +aving 2 years of eBperience- He is also take care of taB matter of company an also prepare balance s+eet of company-

In %inancial analysis team' t+ere are two employees w+o analyses client/s financial position and documents- %inancial analysis I is done by D&% met+od ;Discounted &as+ flow<-

(BI.DA of client/s company is also being assessed by finance departmentAfter c+ecking (BI.DA of company' financial department analyses #ro4ection and profitability of pro4ect%ollowing is sample of pro4ection and profitability report(Ta7le )#

USD in 000s
YEAR TOTAL INCOME TOTAL EXPENSES GR. PROFIT (EBITDA) REPAYMENTS N!" P#$%&" P#$%&" '%"!# "'( S)#*+), 1 10500 1950 8550 1250 7300 5110 5110 2 15000 4500 10500 4050 450 4515 9 25 3 15000 4500 10500 3910 590 4 13 14238 4 15000 4500 10500 3770 730 4711 18249 5 15000 4500 10500 3 30 870 4809 23058 6 15000 4500 10500 3490 7010 4907 279 5 7 15000 4500 10500 3350 7150 5005 32970 8 15000 4500 10500 3210 7290 5103 38073 9 15000 4500 10500 3070 7430 5201 43274 10 15000 4500 10500 2930 7570 5299 48573

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6$&$1<ollo(ings are t+e do!uments analyses 7y finan!e de3artment%

D"&U)( .! ((D(D %"* BU!I (!! (AALUA.I" : 0- .+ree years financials are reFuired to c+eck +istorical data9- #ro4ected sales' eBpense' profit for following = year for w+ic+ we will provide a template to fill@- #rovide w+atever documents available to support pro4ected figures' suc+ as contract signedL write up on marketing for product being developed etc8- "nce t+e above information is provided' we will ask for additional information w+ic+ will differ from case to case-

D"&U)( .! ((D(D %"* D(B. %I A &I E: 0- .+ree years audited Balance s+eet wit+ income taB returns 9- Details ;resume< of #romoters @- Detailed #ro4ect *eport 8- Details of previous pro4ects +andled =- Any group of companies owned and ot+er activities of t+e company 7- Aalue of &ollateral , preferably two times t+e loan amount :- #romoters et wort+ 2- &as+ wit+ t+e company' prefer two times t+e payment ; suppose 03L is annual payment' prefer 93L cas+< 1- *ental Discount , %uture potential of rental income 03- #revious eBperience in +andling *eal (state #ro4ect-

25

D"&U)( .! ((D(D %"* #*IAA.( %I A &I E: 0- &ompanyD Individual profile 9- "ne passport si5e p+otograp+ of t+e applicantDco,applicants @- Age #roof8- Address #roof of *esidential $"ffice=- Income Documents for !elf,(mployed7- Income .aB *eturns for t+e past @ years duly certified by a &+artered Accountant and duly acknowledged by I. aut+orities:- Audited @years Balance !+eets and #rofit $ Loss account2- !tate !ales .aB D&entral !ales .aB *egistration licensing business1- #+otocopies of Advance .aB paymentsDAat *eturns03- Bank Account !tatements for all applicants for t+e last one Sear00- Loan *e,payment .rack *ecord for all ot+er eBisting loans09- In case of takeoverD loan transfer from ot+er bank' list of documents +eld by ot+er Bank0@- #rovisional #$L Account for t+e current financial years08- A brief write,up on t+e profile of business covering t+e nature of business activity' number of years in business' products D services' infrastructure' number of employees' branc+ network' if any' suppliers' distribution' buyersDclients' performance +ig+lig+ts' future business plans and assets #roperty Documentso- or any ot+er certificate for

0- )ot+er Deed 9- !ale Deed @- !ale Agreement 8- C+at+a &ertificate $ C+at+a (Btract =- (& for t+e period of 0@ years ;.ill Date< 7- .aB paid receipts for year 9309,0@ :- Approved #lan

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6$)Marketing 5e3artment%
K)arketing is t+e set of +uman activities directed at facilitation and consummating eBc+angesT #+ilip Cotler ;K)arketing )anagementT< According to American )arketing Association ;A)A< )arketing is t+e activity' set of institutions and processes for creating' communication' delivering and eBc+anging offerings t+at +ave value for customers' clients' partners' and society at large)arketing is meeting t+e needs and wants of a consumer- Andrew &o+en

)arketing Department of Elobal )ergers consists of Dealing,sourcing and advertisement t+roug+ target marketing' blind marketing' digital marketing and print media-

In marketing department' t+ere are t+ree employees engaged.+ere are main t+ree activities in marketing department : Dealing,!ourcing #reparing .easer )arketing

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6$)$15EA@IE41,'0RCIE4
In Dealing,!ourcing' Elobal )ergers find t+e potential client from internet- )arketing team studies t+e website of potential client and contacts t+em and send company broc+ure to t+em If any client s+ows interest t+en ask for pro4ect and company details and forward to Analysis department for furt+er process!ource companies from t+e following sites:
1( +undoodata(co,

9- Indiamart-com @- !+ine-com 8- !iliconIndia-com =- bangalorecircle-com After speaking to potential client once' marketing team does time to time follow up for furt+er process-

6$)$&PREPARIE4 TEA,ER%
"nce potential client send information about +is pro4ect and company profile' marketing team prepares teaser of client/s company wit+out mentioning company name- .+ere are two types of teaser being prepare by team0- (,mail .easer 9- #ower #oint .easer )arketing team prepare .easers internally after complete researc+ about clients- In teasers t+ey +ig+lig+t and provide information about t+e topics in w+ic+ investorsD Buyer look into before investing D acFuiring your company-

28

 Com3any

%ollowing is t+e sample of (,mail .easer :

A brief description of t+e proposal: (Ta7le 6 # Te!+nology !onsulting ,oft(are ,ervi!e Provider (it+ over . >ears of eG3erien!e$ Com3any !onsist of team of eG3erts +aving more t+an 16 years eG3erien!e in domesti! market and more t+an 1/ years eG3erien!e in diverse te!+nology 7a!kground su!+ as Mi!rosoft (e7 7ased solutions and +y7rid9 android and i', mo7ile 3latform$ HF 1 Bangalore$ Produ!t% )obile App t+at +as world wide application- .+e product is developed using Hybrid mobile tec+nology to ensure t+at t+e app will run on all mobile devices suc+ as Android' i"!' ?indows $ Blackberry<eatures% ?it+ t+is product and services' apartment residents can avail t+e fast and efficient services on t+e finger tips and vendor can increase +is business trafficPotential% India is 9nd largest mobile p+one users' by 930= India will +ave 07= million mobile p+one users- .+ere are @3'333 apt- across India- Huge potential for t+e productRe"uired Amount% R'I% @3G ; X23L every year< J 09G of Eross #rofit per year(Bcellent returns for Investors E"uity% EGit% "pen for discussion @-= Sears I * 9-= crore

6$)$)MARBETIE4%

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In )arketing' &ompany does advertising and marketing for its clients- &ompany does four types of marketing tools0- Blind )arketing 9- .arget )arketing @- Digital )arketing 8- #rint )edia

Blind Marketing%

Blind )arketing is t+e art of advertising your business wit+out using t+e company/s name or location- !o keeping client information confidential' company creates a website or blog w+ere company lists t+e information about client/s company' productDservice' clients' Eross salesD(BI.DA' infrastructure' etc-

Target Marketing%
30

 .arget marketing involves breaking a market into segments and t+en concentrating our marketing efforts based on your client business- It will be key to success for small and medium business .+e beauty of target marketing is t+at it makes promotion of clients needs and t+eir organi5ation easier and more cost,effective If client is from !oftware Industry' can call to ot+er players in t+at industry- Look for companies in close proBimity to t+e company t+at is ready for acFuisition- %rom district to state and t+en to nearby states (Bample: KFor Sponge Iron Manufacturing Company located in Raipur. We start with contacting companies in the same industry located near Raipur. Then we contact other companies in the state of Chhattisgarh. From Chhattisgarh we move to region.eg. "ast! West and South#. orth!

5igital Marketing%
31

 Digital marketing is marketing t+at makes use of electronic devices suc+ as computers' tablets' smart p+ones' cell p+ones' digital billboards' television' and game consoles to engages wit+ consumers and ot+er business partners- Internet )arketing is a ma4or component of digital marketing Digital marketing is done to reac+ customers in a timely' relevant' personal and cost,effective manner &ompany advertises Y9= websites (Bamples : i$ )erar-com ii$ avatardealconnect-com iii$ Ouikr iv$ Business on !ale v$ )ergers $ AcFuisition Dealers and etwork vi$ !ell your Business vii$ (ntrepreneur-com viii$ Aolusion-com iG$ Bi5buysell-com

32

 )arketing team also post advertisement on linked in- followings are group on linked in on w+ic+ company update advertisement @inkedIn Post

0- &ompanies for !ale 9- !ale a Business @- &(" &lub of India 8- Elobal Business =- &orporate )$A and capital )arkets 7- India )$A :- Deal %low source 2- Elobal )$A etwork 1- )$A !ource 03- )ergers &lub 00- )ergers and AcFuisition , )$A 09- Bangalore Business and (ntrepreneur &lub 0@- Band of entrepreneurs 08- Best business opportunities in India 0=- %inance plus 07- Elobal !ales business development 0:- )ergers $ acFuisition 02- Business Buyers 01- #rivate (Fuity investment Eroup 93- !mall business network for start,ups and entrepreneur 90- !mall business online community

33

 Print Media%

#rint media marketing is a great way to impress potential investor D buyers and gain reac+ wit+in your industry or town- &ompany +elps its clients by designing' writing and also printing effectively about t+e ads company place #rint media marketing will cover market' w+ic+ uncovered by digital marketing- !till 0D@rd of t+e business people prefer ewspapers and business maga5ine compared to digital media &lients are sent a draft of t+e ad so t+at t+ey can provide us wit+ feedback- Ads cannot be printed wit+out t+e clients consent- &lient pays for t+e ad (Bample: Times of India ewspaper! "conomics Times and etc. Use releaseMyAd$!om to place newspaper ads (Bample: , Here is t+e ad t+at company created to be publis+ed in !unday circulars of .+e .imes of India' Del+i (ditionI))(D- !AL( !#" E( I*" #LA . (!.- 9338- &entral India' eBc- cond- =3 .#D cap- #ower' ?ater' *)' Labor' trans' avail&ontact: 118==1231@'raviZglobalmergers-in

34

6$6Human Resour!e 5e3artment%

In Elobal )ergers' Human *esource department works on based on employeeDpeople concentrated .+ere is one H-*-!pecialist in company- .+ere are no specific or important role of H-*- Department in Elobal )ergers as company +as less no- of employees and small team &ompany also provides opportunity for interns+ip for )BA students t+roug+ interview- &ompany offers unpaid interns+ip but ample learning opportunities are t+ere in company-

6$:IT 5e3artment%
.+ere is one I. Admin in Elobal )ergers I. Admin looks after all servers and solve tec+nology related problem-

6$=Coordination 7et(een all de3artments%

In any organi5ation co,ordination between all departments is necessary for success- In global mergers' all t+e department dependent on eac+ ot+er- %irst )arketing department starts wit+ dealing,sourcing- "nce marketing team got any client' t+en t+ey ask for documents and forward it to finance and analysis department- %inance department submit t+eir report to analysis department- .+en )arketing team prepares teaser and do all type of advertises after approval of analysis team- And t+en it moves to close t+e deal-

35

CHAPTER : ,H'T Analysis

:$1,trengt+ of Com3any%
Domain (Bpertise: 0- Dedicated team of specialists wit+ ric+ transaction eBperience for eac+ sector9- Understanding of key business drivers and in,+ouse domain knowledge and insig+t across focus sectors@- !pecialist in t+e cross,border mid,market segment #roduct Cnowledge: 0- In,dept+ understanding of various capital syndication alternatives 9- Ability to provide end,to,end client support across t+e value c+ain of different segments in our focus sectors

:$& Heakness of Com3any%

0- .oug+ competition from big industry consultants as well as ot+er knowledge consulting agencies9- %luctuating markets result in instability

36

:$)'33ortunities of Com3any%
1( .+ere are enormous growt+ prospects in emerging markets

9-

Increasing t+e spending on infrastructure may spur demand for advisory services

3( Diversifying portfolios for customers 4( Investments across t+e world

:$6T+reats of Com3any%
0- &+anging govt- regulations and financial crisis like recessions 9- Unstable mortgage market

37

CHAPTER = ,ummary of <indings

(Ta7le : #

4@'BA@ MER4ER, Com3any Eame Category ,e!tor Tagline; ,logan 0,P 4lo7al Mergers %inancial !ervices ;)$A ' %und *aising' &orporate Advisory< %inancial )arket ;Investment Banking' )$A< )$A Advisors !ound Cnowledge' (Bpertise' Long .erm *elation wit+ &lients ,TP ,egment Target 4rou3 Positioning (nterprise and !tartups w+o are seeking financial +elp and advice )id &ap &ompanies' !tartups company An institution w+ic+ builds relations wit+ its clients ,H'T Analysis 0- Dedicated team of specialists wit+ ric+ transaction eBperience for eac+ sector9- Understanding of key business drivers and in,+ouse domain knowledge and insig+t across focus sectors,trengt+ @- !pecialist in t+e cross,border mid,market segment 0- .oug+ competition from big industry consultants as well as ot+er knowledge consulting agencies9- %luctuating markets result in instability Heakness
1( .+ere are enormous growt+ prospects in emerging

markets 9Increasing t+e spending on infrastructure may spur demand for advisory services
3( Diversifying portfolios for customers

'33ortunity

4( Investments across t+e world 38

0- &+anging govt- regulations and financial crisis like recessions T+reats 9- Unstable mortgage market Com3etition 0Com3etitors !tarlig+t Advisors

9- )-C-.yagi $ &o@- "t+er Big firms like >-#-)organ'C#)E'&iti Eroup etc-

CHAPTER . Con!lusion
.$1Con!lusion
39

,uggestion

 "ne si5e doesnQt fit all- )any companies find t+at t+e best way to get a+ead is to eBpand owners+ip boundaries t+roug+ mergers and acFuisitions- %or ot+ers' separating t+e public owners+ip of a subsidiary or business segment offers more advantages- At least in t+eory' mergers create synergies and economies of scale' eBpanding operations and cutting costsInvestors can take comfort in t+e idea t+at a merger will deliver en+anced market power .+us I saw t+at +ow financial market +as c+anged over time and acFuired new dimensions and as to Elobal )ergers- %rom t+is pro4ect report I understand t+at in t+e present scenario Investment Banking and )ergers $ AcFuisition industry is developing rapidly- And as per my researc+ I can conclude t+at Elobal )ergers is now small firm but wit+ t+eir mission and vision and under eBpert leaders+ip' company would be strong player in )$A industry in India as well as in t+e world-

.$&,uggestions%
&ompany s+ould be focus on eBpansion of business
40

&ompany s+ould spread more awareness t+roug+ advertisement in newspaper-

&ompany need to focus on t+e employees monetary return i-e- remuneration-

.o introduce incentives and perks sc+emes-

)ore new innovative t+ings s+ould be conducted to motivate employees-

CHAPTER 2 Bi7liogra3+y
41

www-wikipedia-com www-globalmergers-in www-mbaskool-com Broc+ure of Elobal mergers .emplates of Elobal )ergers *eport of Elobal )ergers

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