Can Private Equity Boom if Public Markets Bust? Discover powerful new ways for PE to create unexpected paths to value. PE Roundup 3Q2018 & Sept 18 The better the question. The better the answer. The better the world works.
PE Quarterly Roundup 3Q2018
Key Trends Half Yearly Investments On a YoY basis, quarterly PE/VC investments in 3Q2018 declined 23% in value terms compared to 3Q2017 (US$ 6.7 billion vs US$ 8.7 billion in 3Q2017) despite a 29% increase in the number of deals over the same period (178 deals vs 138 deals in 3Q2017). On a sequential basis, the quarterly decline in value of investments was 11% and 16% compared to 2Q2018 and 1Q2018 respectively. The decline in investments was mainly on account of fewer large deals (deals with value greater than US$100 million) in 3Q2018. 3Q2018 recorded 13 large deals aggregating US$3.9 billion compared to 18 such deals in 3Q2017 aggregating US$7 billion. 2Q2018 recorded 25 large deals aggregating US$6.1 billion, while 1Q2018 recorded 13 large deals aggregating US$5.7 billion. Steady flow of large deals had helped each of the last four quarters record investments in excess of US$7 billion. Though the trend has been broken in 3Q2018, there were couple of large deals in the works in 3Q2018 that if concluded can add significantly to the overall investment tally for 2018. These include, TPG s and ADIA s US$1.2 billion funding of UPL for its overseas acquisition of Arystra and Westbridge, Madison and Rakesh Jhunjunwala s US$1 billion investment in Star Health and Allied Insurance. The largest deals in 3Q2018 include Softbank, Sequoia, Lightspeed and others investing US$1 billion in OYO Rooms, KKR s US$ 530 million buyout of Ramky Enviro and AIONJSW s US$400 million buyout of Monnet Ispat. From the point of view of type of investment, Growth and PIPE deals recorded significant fall in investments. 3Q2018 recorded US$2.6 billion in growth deals (US$5.7 billion in 3Q2017 and US$3.5 billion in 2Q2018) and US$57 million in PIPE deals (US$599 million in 3Q2017 and US$690 million in 2Q2018). On the other hand, 3Q2018 was the best quarter for startup investments, with deals worth US$2.1 billion, being the best quarter for startup investments since 2Q2015 (US$1.7 billion). Buyouts also recorded healthy growth in 3Q2018 with US$1.3 billion invested across 9 deals compared to US$920 million across 6 deals in 3Q2017. This takes the total value of buyouts in 2018 till date to US$6.3 billion (32 deals), surpassing the previous record set in 2015 of US$3.9 billion across 29 deals. Page 3
Key Trends Half Yearly Investments (cont d.) From a sector point of view, most of the top sectors for PE/VC investments recorded noticeable declines in 3Q2018. Ecommerce, Real Estate, Financial Services, and Healthcare, which are some of the sectors that traditionally receive maximum PE/VC investments, recorded quarterly investment declines in excess of 50% on a YoY basis. Power & Utilities, Logistics and Technology were the few sectors to show improvement in 3Q investments compared to last year, albeit with very few deals Page 4
Key Trends Half Yearly Exits If we exclude the Flipkart deal, at US$1.3 billion PE/VC Exits declined by 71% on a YoY basis in 3Q2018, making it the worst performing quarter in 2018 for exits. The decline in exits in 3Q2018 was across most types both in terms of value and volume. Though exits via strategic sale were the highest ever at US$16.1 billion (16 deals), it was mainly on account of the single large US$16 billion Walmart Flipkart deal. Exits via secondary sale (sale to other PE funds) recorded US$390 million (7 deals), 73% lower compared to 3Q2017 in terms of value. Volatility in the markets continued to impact open market deal activity as well as PE backed IPOs. 3Q2018 recorded just 14 deals worth US$647 million compared to 32 deals worth US$1.5 billion in 3Q2017, US$1 billion in 2Q2018 and US$890 million in 1Q2018. IPO market also recorded muted performance with just two PE backed IPOs in 3Q2018 (7 in 3Q2017) which include TA Associates selling its 11% stake in TCNS Clothing for US$72 million, and Micro Ventures selling its stake in Credit Access Grameen Limited for US$72 million. From a sector perspective, Ecommerce recorded highest value of exits in 3Q2018 (US$16 billion across 3 deals) mainly on account of the large US$16 billion deal followed by Financial Services (US$491 million across 7 deals). The largest exit in 3Q2018 was also the largest exit ever for the Indian PE/VC industry which saw Softbank, Tiger Global, Accel and others selling around 77% stake in Flipkart to Walmart for US$16 billion. Fund Raise 3Q2018 saw US$2.6 billion in fund raises, 17% higher compared to 3Q2017 and the highest quarterly fund raise ever. Sequoia s US$695 million sixth fund and True North s US$ 600 million sixth fund were the largest fund raises in 3Q2018. New fund raise plans announced in 3Q2018 stood at US$4.3 billion. Page 5
PE/VC quarterly headline trends Investments US$m 9,000 6,000 188 220 178 146 Total PE/VC Investments 164 157 165 121 129 138 163 182 177 178 # 250 200 150 3,000 5,139 6,003 5,043 4,310 3,658 3,097 5,138 4,179 6,214 8,686 7,379 7,986 7,501 6,681 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 100 50 0 Value (US$m) # of deals US$m 9,000 6,000 3,000 532 55 1,261 PE/VC Investments split across asset classes 302 2,254 300 1,634 146 789 287 1,440 78 1,033 1,451 632 1,019 696 350 253 51 889 148 432 106 837 763 4,608 4,687 3,715 3,071 3,078 2,154 4,041 3,874 4,894 6,130 5,639 4,901 6,566 5,918 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 PE/VC Investment (other sectors) (US$m) Real Estate (US$m) Infrastructure (US$m) Page 6
PE/VC quarterly headline trends Exits US$m 5,000 4,000 3,000 59 66 69 42 44 Total PE/VC Exits 64 59 61 69 64 64 51 50 17,272 40 # 75 50 2,000 1,000 2,749 1,205 1,358 2,067 1,073 2,046 1,483 2,033 2,681 4,550 3,749 1,824 3,713 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 1.3 25 0 US$m 4,000 3,000 2,000 1,000 Value (US$m) # of exits PE/VC Exits split across asset classes 4 276 67 236 13 69 1 44 111 56 252 3 76 184 0 45 40 84 15 262 350 157 2,667 1,165 1,274 1,814 901 1,999 1,088 1,793 2,570 4,270 3,446 1,486 3,713 17,249 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 1.3 Other Sectors (US$m) Real Estate (US$m) Infrastructure (US$m) Page 7
PE/VC quarterly headline trends Fund Raise US$m 2,000 1,000 Fund Raise 16 14 13 12 12 11 11 11 11 9 9 8 2 1,938 1,285 1,325 2,075 942 320 976 1,287 719 2,234 1,533 1,304 1,701 2,607 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 17 # 20 15 10 5 Total funds raised (US$m) Total # of funds raised Page 8
Investments (excluding Infrastructure and Real Estate) Total Investments (US$m) # of Deals 3Q2018 5,918 3Q2018 168 3Q2017 6,130 3Q2017 122 Deal Type US$m Deal Type # Credit Investment Buyout PIPE Startup/Early stage Expansion/Growth 96 561 280 57 548 664 1,283 2,088 2,392 4,077 Credit Investment Buyout PIPE Startup/Early stage Expansion/Growth 12 7 9 3 4 6 37 52 69 90 Deal Size US$m Deal Size # > $100m 3,409 4,695 > $100m 10 12 $50m $100m 565 1,285 $50m $100m 9 15 $20m $50m 659 474 $20m $50m 20 15 $10m $20m 303 224 $10m $20m 21 15 < $10m 261 172 < $10m 41 72 ** Deal value not available on 19 out of 160 deals in 2Q2018 and 30 out of 151 deals in 2Q2017 Page 9
Investments Infrastructure and Real Estate Total Investments (US$m) # of Deals 3Q2018 763 2Q2018 11 3Q2017 2,556 2Q2017 16 Credit Investment Buyout PIPE Startup/Early stage Expansion/Grow th Deal Type US$m 486 179 640 52 30 59 247 1,626 Credit Investment Buyout PIPE Startup/Early stage Expansion/Growth Deal Type # 2 2 2 2 3 4 5 7 Deal Size US$m Deal Size # > $100m $50m $100m 196 62 536 > $100m 2,295 $50m $100m 1 2 3 6 $20m $50m $10m $20m < $10m 158 30 31 1 11 $20m $50m $10m $20m < $10m 2 2 2 2 5 ** Deal value not available on 2 out of 10 deals in 2Q2018 and 5 out of 10 deals in 2Q2017 Page 10
3Q 2018 Investments Sector Cut 3Q2018 3Q2017 Top Sectors by value (US$m) Top Sectors by # of deals Ecommerce 1,459 2,849 Finacial Services 36 43 Financial services 899 1,359 Technology 23 33 Power & Utilities 895 Ecommerce 15 20 Real Estate, Hospitality & Construction 763 2,254 Food and Agriculture 8 11 Technology 229 656 Healthcare 10 13 Metal & Minning 406 Real Estate 9 11 Travel 16 279 Logistics 8 6 Media & Entertainment 217 Retail & Consumer Products 8 12 Pharmaceuticals 217 39 Industrial Products 3 7 Others 889 1941 Others 32 28 *** RCP Retail & Consumer Products Page 11
Top PE Investments Top PE investments excluding Infrastructure and Real Estate in 3Q2018 Company PE Investor Sector Stage US$m Oravel Stays Private Limited. (OYO Rooms) Ramky Enviro Engineers Limited. Monnet Ispat And Energy Limited CLP India Private Limited One97 Communications (Paytm) Lightspeed, Sequoia, Greenoaks, SoftBank Ecommerce Startup/Early Stage Stake (%) 1,000 NA KKR Power & Utilities Buyout 530 NA AION JSW Metal & Minning Buyout 400 75 Quebec Deposit and Investment Fund Power & Utilities Growth Capital 363 5 Berkshire Hathaway Financial services Growth Capital 300 3 ANI Technologies (Ola) Temasek Transportation Growth Capital 225 NA Hiveloop Technology Private Limited GreyOrange Pte Ltd. CureFit Healthcare Private Limited Lightspeed, DST Global Blume Ventures Fund I, Mithril Capital Management LLC, Binny Bansal Accel, IDG Ventures, Kalaari Capital, Oaktree Ecommerce Startup/Early Stage 225 26 Technology Growth Capital 140 NA Healthcare Startup/Early Stage 120 NA Sai Life Sciences Ltd. TPG Pharmaceuticals Growth Capital 105 35 Page 12
Top PE Investments Top Infrastructure and Real Estate investments in 3Q2018 Company PE Investor Stage US$m Stake (%) Projects of three developers Piramal Capital Credit Investment 214 NA 3 Mumbai real estate projects of Lodha and Saporji Palllonji KKR Credit Investment 176 NA Provenance Land Pvt Ltd GIC Pvt. Ltd Growth Capital 145 49 PBEL Property Development India Pvt. Ltd., Residential Projects Peninsula Brookfield Growth Capital 100 NA Samhi Group Piramal Capital Credit Investment 96 NA Page 13
3Q2018 Exits Analysis Total Exits (US$m) # of Deals 3Q2018 17,272 3Q2018 40 3Q2017 4,550 3Q2017 65 Exit Type US$m Exit Type # Open Market Secondary Strategic Buyback IPO 647 1,472 390 1,424 382 13 281 143 991 16,078 Open Market Secondary Strategic Buyback IPO 1 2 7 6 7 9 11 14 16 32 Top Sectors US$m Top Sectors # Ecommerce Financial Services Travel Technology Retail and Consumer Others 897 491 1,561 225 189 367 115 118 251 1,606 16,000 Technology Financial Services Retail and Consumer Ecommerce Infrastructure Others 1 2 3 3 4 6 7 9 12 13 12 Page 14
Top Exits Top Exits in 3Q2018 Company Sector Sellers Buyer Exit Type US$m Stake (%) Flipkart Pvt. Ltd. ANI Technologies (Ola) Ecommerce Transportation Softbank, Naspers,Tiger, Accel, IDG and others Helion Ventures, Accel India, Bessemer, Others Walmart Inc. Strategic 16,000 77 Temasek Secondary 225 NA Hexaware Technologies Ltd. Technology Baring Asia NA Open Market 160 8 Sai Life Sciences Ltd. Pharmaceuticals TATA Capital TPG Secondary 105 NA TCNS Clothing Company Pvt. Ltd. Credit Access Grameen Limited Retail and Consumer products TA Associates NA IPO 72 11 Financial Services MicroVentures NA IPO 72 80 Page 15
Fund Raise Top Fund Raise in 3Q2018 Status Fund US$m Strategy Remark Raised Sequoia India 695 Technology, Healthcare & Consumer Products Sixth Fund Raised True North 600 Sector Agnostic Sixth Fund Raised Matrix Partners India 300 Consumer Technology Third Fund Raised Greater Pacific 300 Sector Agnostic Second Fund Raised Lightbox Ventures 178 Consumer Technology Third Fund Page 16
PE Monthly Roundup Sept 18
Key Trends September 2018 recorded US$3.4 billion in investments, a 89% increase over September 2017 and almost twice the investments received in the previous month. The rise is mainly on account of few large deals of value greater than US$100 million. September 2018 had six large deals adding up to US$2.4 billion compared to seven deals of aggregate value US$1.3 billion in September 2017 and 5 deals of aggregate value US$1.1 billion in August 2018. The US$16 billion WalmartFlipkart deal dominated exits in September 2018. There were US$289 million worth funds raised in September 2018. Page 18
PE/VC monthly headline trends Investments US$m 5,000 4,000 3,000 2,000 1,000 Total PE/VC Investments 73 66 67 61 55 55 53 53 56 46 41 56 55 1,795 2,095 2,637 2,647 3,506 1,438 2,972 2,392 3,500 1,381 1,617 1,661 3,404 Sep17 Oct17 Nov17 Dec17 Jan18 Feb18 Mar18 Apr18 May18 Jun18 Jul18 Aug18 Sep18 # 80 60 40 20 0 Value (US$m) # of deals US$m 5,000 4,000 3,000 2,000 1,000 820 300 300 435 322 684 1,264 230 2,212 1,773 1,653 PE/VC Investments split across asset classes 440 11 1,634 335 3,393 243 15 392 360 388 2,686 1,195 951 2,057 3,061 1,361 1,224 1,301 Sep17 Oct17 Nov17 Dec17 Jan18 Feb18 Mar18 Apr18 May18 Jun18 Jul18 Aug18 Sep18 PE/VC Investments(other sectors) (US$m) Real Estate (US$m) Infrastructure (US$m) Page 19
PE/VC monthly headline trends Exits US$m Total PE/VC Exits # 3,000 2,000 1,000 24 17 25 22 27 12 12 20 19 9 12 19 9 25 2,044 623 2,725 401 969 150 705 1,629 1,638 438 397 846 16,029 Sep17 Oct17 Nov17 Dec17 Jan18 Feb18 Mar18 Apr18 May18 Jun18 Jul18 Aug18 Sep18 Value (US$m) # of exits US$m PE/VC Exits split across asset classes 3,000 16 16,029 2,000 1,000 212 2 1,832 80 76 158 129 813 7 466 2,708 62 67 97 272 576 1,629 1,638 438 377 13 844 53 Sep17 Oct17 Nov17 Dec17 Jan18 Feb18 Mar18 Apr18 May18 Jun18 Jul18 Aug18 Sep18 Other Sectors (US$m) Real Estate (US$m) Infrastructure (US$m) Page 20
PE/VC monthly headline trends Fund Raise US$m 2,000 1,000 Fund Raise 9 8 7 6 5 5 4 4 3 3 3 3 2 1,689 31 675 828 244 153 1,060 470 368 863 257 2,063 288 Sep17 Oct17 Nov17 Dec17 Jan18 Feb18 Mar18 Apr18 May18 Jun18 Jul18 Aug18 Sep18 # 10 8 6 4 2 Total funds raised (US$m) Total # of funds raised Page 21
PE Investments US$3,393 million over 55 deals Top Sectors by Value US$m Top Sectors by Volume Ecommerce 1,337 Technology 15 Financial services 558 Financial services 12 Technology 446 Ecommerce 8 Metal & Minning 400 Business and Professional Services 3 Power & Utilities 363 Food and Agri 3 Others 299 Others 14 Deal Value US$m (Volume) Deal Type US$m (Volume) 2428(6) 1491(24) 1378(21) 679(8) 500(3) 82(19) 61(4) 142(5) 13(3) 9(1) < $10m $10m $20m $20m $50m $50m $100m > $100m Credit Investment Buyout PIPE Financing Startup/Early Stage Growth Capital Page 22
Infra and Real Estate Investments US$11 million over 3 deals By Value US$m By Volume Real Estate 11 Real Estate 3 Infrastructure Infrastructure Deal Value US$m (Volume) Deal Type US$m (Volume) 10(1) 10(1) 1(1) 1(2) < $10m $10m $20m $20m $50m $50m $100m > $100m Credit Investment Buyout PIPE Financing Startup/Early Stage Growth Capital Page 23
Top PE Investments Top PE Investments excluding Infrastructure and Real Estate in Sept 2018 Company PE Investor Sector Stage US$m Oravel Stays Private Limited. (OYO Rooms) Monnet Ispat And Energy Limited CLP India Private Limited One97 Communications (Paytm) Hiveloop Technology Private Limited GreyOrange Pte Ltd. Lightspeed, Sequoia, Greenoaks, SoftBank Ecommerce Startup/Early Stage Stake (%) 1,000 NA AION JSW Metal & Minning Buyout 400 75 Quebec Deposit and Investment Fund Power & Utilities Growth Capital 363 5 Berkshire Hathaway Financial services Growth Capital 300 3 Lightspeed, DST Global Blume Ventures, Mithril Capital Management, Binny Bansal Ecommerce Startup/Early Stage 225 26 Technology Growth Capital 140 NA Page 24
Top Infrastructure and Real Estate Investments Top Infrastructure and Real Estate Investments in Sept 2018 Company PE Investor Sector Stage US$m Dwelve Spaces Pvt. Ltd. Beneficent Knowledge Parks and Properties Ltd. Accel, Matrix Partners, Sequoia Real Estate Startup/Early Stage Stake (%) 10 NA Excelestar Ventures Real Estate Growth Capital 0.7 NA Page 25
Exits US$16 billion across 9 deals in Sept 2018 Exits in Sept 2018 Ecommerce Deal Value US$m (Volume) 16000(1) Deal Value US$m (Volume) 16019(8) Food and agriculture 18(1) Pharmaceuticals 9(1) Healthcare Technology 1(1) 78(5) 9(1) IPO Buyback Strategic Secondary Open Market Page 26
Exits Top Exits Top Exits in Sept 2018 Company Sector Sellers Buyer Exit Type US$m Stake (%) Flipkart Pvt. Ltd. TongueStun Food Network Pvt. Ltd. Ecommerce Food and agriculture Softbank, Naspers,Tiger, Accel, IDG and others Uniqorn Ventures Fund, Haresh Ram Chawla Walmart Inc. Strategic 16,000 77 Zomato Media Pvt. Ltd. Strategic 18 NA Page 27
Fund Raise Top Fund Raise/Announcements in Sept 2018 Status Fund US$m Strategy Remark Raised Lightbox Ventures 178 Consumer technology Raised Motilal Oswal RE 79 Real Estate Raised pi Ventures 31 Sector Agnostic Page 28
About EY s Private Equity Services Practice EY has been working with the private equity industry for more than 25 years, with approximately 25,000 seasoned professionals worldwide dedicated to the industry and its business issues. EY serves 74% of the top 300 PE firms included in the Global PEI 300 firms list. Private equity firms, portfolio companies and investment funds face complex challenges. They are under pressure to deploy capital amid geopolitical uncertainty, increased competition, higher valuations and rising stakeholder expectations. Successful deals depend on the ability to move faster, drive rapid and strategic growth and create greater value throughout the transaction life cycle. EY taps its global network to help source deal opportunities and combines deep sector insights with the proven, innovative strategies that have guided the world s fastest growing companies. In India, EY is among the leading providers of advisory, tax, transactions and assurance services. The organization is also the number one professional services brand* in India, which is a testimony to our relentless commitment to deliver exceptional client service and create a better working world. EY has 16 offices spread across 10 cities in India. Worldwide, our 247,570 people across 150+ countries and 700+ cities are united by our shared values and their unwavering commitment to quality. EY s India Private Equity Services Practice has been among the top advisors for private equity deals over the past ten years. EY has been awarded the Most Active Transaction Advisor award by Venture Intelligence for 20092013 and also the Investment Bank of the Year, Private Equity award by VC Circle in 2012 and 2017. EY s India Private Equity Services Practice provides value to PE funds and their portfolio companies through its deep sector and service expertise. EY India is organized around key industry verticals in a matrix structure that enables us to offer an unparalleled blend of industry expertise and functional skills. We actively track about 15 sectors with sector leads driving our penetration in each of those sectors. Page 29
About EY s Private Equity Services Practice (cont d..) EY has been ranked as #1 Financial Advisor for over a decade across Mergermarket, Thomson Reuters and Bloomberg**. Our position as the foremost M&A advisor in the Indian midmarket enables us to create a robust deal origination pipeline for our PE/VC clients, acting as the tip of the spear of what is India s dominant PE Services practice. Merger market Thomson Reuters Bloomberg 29 18 40 39 24 19 29 12 49 41 43 33 18 21 20 19 34 21 38 28 34 21 26 15 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 EY Closest compete # 1 advisor on deal count in Financial advisory league tables across databases Consistently maintaining a significant lead from closest compete Adjudged as the Investment Bank of the Year at the VC Circle Awards 2017 Page 30
EY services for Private Equity We offer an array of services to Private Equity funds and their portfolio/investee companies through our various service lines. Partners (Personal tax) Fund Raising (Audit of fund performance) Fund assurance (Assurance and Tax Structuring) Buyside advisory (M&A and valuations, Fraud, Investigation and Dispute Services) Funds Transaction Advisory Services Buyside support (Financial Due Diligence, Tax Structuring and Diligence, Business DD, Environmental Compliance, CDM Human Capital, Valuations) Exit readiness (IPO, GAAP Conversion, SOX Compliance, VDD, Sale Mandates, Clause 49) Distressed (Bank intermediary, working capital, cost reduction) Portfolio Services Assurance (Assurance, Tax Compliance, Risk Management, Corporate Governance Advisory, Internal Audits and Fraud reviews) Transition (Transaction Integration, GAAP Conversion, Governance, Controls Assessment, MIS Development, Process Advisory, Standard Operating Procedures) Growth (Strategic Options, Technology Security, IT Strategy, Operational Improvement, Market Entry Options & Working Capital Management) Page 31
Delivering issuesbased solutions to the entire PE enterprise Solutions EY has established six distinct solutions reflecting the holistic set of challenges that PE firms face across all levels of the organization the management company, the funds, and their portfolio companies. A B Operating model and automation Global compliance and reporting Deal origination Integrated due diligence Value creation Exit readiness and IPO Alternative asset managers need to drive efficiency through multiyear target operating models and infrastructure strategies to remain competitive. These align with strategic growth plans by leveraging vendor and service provider activities. EY defines and monitors data analytics and key performance indicators to annually assess data governance and risk against these target models. Large asset managers have hundreds of nonus legal entities in multiple countries, and continually create new ones all with different compliance obligations. Many are outsourced and require local knowledge. EY gathers the data, leverages local EY teams familiar with accounting and tax laws, performs data analytics to identify trends, risks and opportunities and monitors filing requirements. The intense competition for a limited number of deals raises stakes to win for private equity firms. A proprietary investment approach, driven by sector insights, enables firms to confidently place winning bids that generate appropriate returns. EY s global origination team turns opportunities into actionable strategies. Our proprietary knowledge and advanced analytics help develop strategic capital options to help firms achieve success. Private equity firms conduct diligence on assets across strategic, financial, tax, operational and HR issues. Firms historically used issuebased advisors, managing different parties and consolidating findings at the end of the process. Employing EY s integrated diligence approach at the early stages of a transaction provides more effective, comprehensive diligence on an asset, giving firms a distinct competitive advantage. Privateequity firms face increasing pressure to attract fresh capital. This requires generating greater investment returns and demonstrating a consistent track record in creating value in their portfolio. EY s value creation solution addresses these challenges across all five stages of the deal life cycle, including deal origination, diligence, inception, optimization and exit strategy. Private equity firms must plan exits rigorously in order to successfully monetize their investment during the exit process in today s challenging environment. Executives must identify key shortand longterm priorities prior to undertaking an IPO or alternative transaction. EY can advise deal teams and portfolio companies on exit alternatives, assess exit readiness, prepare a business for exit/ipo and create a value story for targeted buyers. Page 32
Focused advisory solutions for private equity backed portfolio companies Growth Navigator Achieving your growth ambitions Having a broader perspective on the drivers of growth in your business and finding innovative ways to accelerate and sustain that growth can give you a competitive advantage. That s why we ve developed EY Growth Navigator, an interactive experience that uses the EY 7 Drivers of Growth to help you and your leadership team assess your business s current and aspirational position, and create a strategic road map to help you get there. Route to Market (RTM) Deliver a successful strategy for your business EY identifies focused opportunities for optimizing cost and growth after full assessment; designs new RTM, including different approaches for different segments (customers, regions, seasonal demand); identifies the optimal concessionaires model taking into account different distribution approaches; and supports the implementation of the RTM by providing IT specs and additional services (e.g., stock management options). Performance improvement Depending on objectives and business context, EY helps the client develop a combination of shortterm and longterm strategies to reduce costs, optimize process and bring in efficiency and effectiveness across all layers of business to deliver positive impact on EBITDA by ensuring optimal utilization of both tangible and intangible resources. Page 33
Focused advisory solutions for private equity backed portfolio companies (cont d..) Cyber security EY assists internal teams to build cyber awareness and conduct companywide training, as well as training of board of directors. EY supports in building regulations and compliance requirements with audit and readiness services. EY helps transform the security program and integrate information security and IT risk across the enterprise as well as help implement globalized data protection strategies to protect information that matters, with consideration of regulatory and industry compliance. Analytics Generate insights to make smarter, faster decisions EY helps clients build data and information strategies using various analytics tools to deal with big data to address various areas of business, ranging from opportunity sizing and feasibility, operations and customer modelling, executive decision making, merger acquisition and valuation. EY helps across the capability value chain ranging from strategy, implementation, hosting and running the analytics functions. IPO readiness The first step in the IPO value journey EY s IPO readiness service is the first step in what we describe as the IPO value journey and is designed to guide the client through a successful transformation from private to public status. Achieving readiness will ensure a strong debut in the capital markets. Getting IPO readiness right means implementing change throughout the business, organization and the corporate culture. As a public company, the client will be subject to increased filing requirements, transparency, compliance, scrutiny by investors and analysts, and overall accountability for delivering on promises. Successful businesses start to prepare typically 12 to 24 months before the IPO in many cases with an IPO readiness assessment. Page 34
Ernst & Young LLP EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is one of the Indian client serving member firms of EYGM Limited. For more information about our organization, please visit www.ey.com/in. Ernst & Young LLP is a Limited Liability Partnership, registered under the Limited Liability Partnership Act, 2008 in India, having its registered office at 22 Camac Street, 3rd Floor, Block C, Kolkata 700016 Contacts Private Equity Services Practice Vivek Soni Partner and National Leader E: Vivek.Soni@in.ey.com Narendra Rohira Partner, Transaction Tax E: Narendra.Rohira@in.ey.com Subramaniam Krishnan Partner, Tax & Regulatory Services E: Subramaniam.Krishnan@in.ey.com Research and Insights Allwyn D Souza Manager E: Allwyn.Dsouza@in.ey.com Brand, Marketing and Communications Pooja Bhalla Mathur Vice President E: Pooja.Mathur@in.ey.com Dilip Dusija Associate Partner E: Dilip.Dusija@in.ey.com Nachiket Deo Partner, Transaction Tax E: Nachiket.Deo@in.ey.com Shreya Sharma Assistant Manager E: Shreya4.Sharma@in.ey.com 2018 Ernst & Young LLP. Published in India. All Rights Reserved. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. Page 35