PE multiple mergers and acquisitions tend to withdraw into the other channel

 2010, the local capital market, IPO is still dazzling.

but more and more forces are to fight for Pre-IPO cake, try a slice in the IPO feast, Pre-IPO is also in full swing in the PE wave turned into a Red Sea, which PE have wondered for more opportunities, sense of smell of the PE are looking for a shortcut to another exit, exit by way of mergers and acquisitions.

data show that last year's extremely active in China's domestic M & A transactions, mergers and acquisitions market to achieve a growth spurt, in which case the PE also increased significantly, up doubled.

reporters found that has a wealth of experience in investment banking institutions are already in the acquisition of PE on the road out very much at home, and many local PE is still staring Commission issuance examination committee of the hard-won release goes on approval.

M & curtain

2010, China's Growth Enterprise Market in the second year of his birth still sparkle.

of PE, the Golden Age under the looming crisis, many investors have complained that the industry often seen at high prices to snatch the project, which is one of the things they worry. They also face the reality that fewer and fewer companies can become shareholders, IPO premium fade away, the more stringent listing review, etc., all make this spacious Boulevard IPO faces more challenges.

In sharp contrast, in mature capital markets abroad, Pre-IPO to bring high-yield era comes to an end, the outbreak of the opportunity to achieve through the IPO is not much, but rather to open up the deal for the PE a new front, it also brings higher returns, many international well-known PE, such as KKR and Carlyle are all M & A experts.

In fact, M & A deals are not just out targets to achieve a PE transactions, usually the PE integration of resources, participate in more projects, ways to capture higher yields.


but China's M & A market is a substantial increase in the degree of activity.

2010, in China, driven by rapid economic growth, mergers and acquisitions in the country support policies related to the stimulation, the enthusiasm of the Chinese M & A expansion of warming. Annual number of mergers and acquisitions completed in each quarter, compared with 2009 are to achieve the doubling of the quarter, the transaction amount is also rising. China M & A market in 2010 from 622 deals were completed, an increase of 111.6%; of which 501 deals from the total disclosure of price amounted to $ 34,803,000,000.

some of the PE is sensitive sense of smell, the eyes eye on M & A market. In 2010, within the study area in the Qing dynasties VC / PE-related M & A total of 91 onwards, an increase of up to 116.7%; 69 deals from the disclosure of the price of the total amount of $ 6,364,000,000.

trend. In fact, leveraged buyouts in the United States is 70 years from the 20th century began to become popular by the M & PE.

Group Managing Director of Silver Lake that Chen Xun, should be defined in several different aspects of this market, first leveraged buyouts. RMB environment, it is now very difficult, and the reason is to make a successful leveraged buyouts, there must be a very mature debt market, including corporate bonds, bank debt and intermediate bonds and so on. Now, China is simply not, of course, hope that over time can be developed. So today's leveraged buyout occurred in China, if it exists, it must be done outside the institution.

corresponds with the leveraged buyout, the acquisition financing, mergers and acquisitions is the PE funds, the funds available to A Company, A Company B re-use the money to buy the company. This is a common form of mergers and acquisitions, currently in China is in the ascendant.

Now, there are so China began a pattern, that is, they think PE is willing to find a mature, beautifully shy of the management team of the company, to take this platform to integrate industry, now more and more such cases .

pioneer

PE in the domestic market, there are already some successful pioneer.

1 25, Chan, chairman of Zoomlion pure new presidential palace in Italy, was awarded the Zhan honor of the new access to the backstage and ultimately, well-known PE institutions Hony Capital.

Hony Capital in 2006 has become a strategic investor Zoomlion, 2008, Zoomlion announced the formal acquisition of a sudden the world's third largest manufacturer of concrete - Italy CIFA Company, which became the aforementioned Zhan awarded to the direct cause of the new.

In fact, in the promotion of Zoomlion of CIFA acquisition process, Hony Capital and play a central role not just a director, or the generosity of financial investors. In the acquisition, the common investor to pay 251.5 million euros total, including funding Zoomlion 162.6 million euros, and another 108.4 million euros by the Hony Capital, Goldman Sachs and Man Linda Fund co-financing. As in the overseas operations, the transaction also appeared leveraged buyout figure.

this case since the PE industry as a classic case of mergers and acquisitions, even if the initial Hony Capital was a great challenge. Zoomlion for the joint acquisition of CIFA's portfolio of overseas acquisitions by John H. Zhao called the

and Hony Capital in this transaction reflects the acquisition of superior talent, and the proceeds in advance of the lock. The acquisition agreement, the acquisition of three years, Hony Capital can seek out, and when the repurchase price is higher than the EBITDA multiple access.

studied under the first PE investment in the domestic M & A transactions in Hony awareness has been very mature, Zoomlion is only the one of the cases handled by the M & A transactions.

all kinds of M & A transactions in China's PE sector is gradually flash. Chen Xun where the investment group Silver Lake have also been a recent attempt to deal, Silver Lake investment to 124 million cash acquisition of 62% of Focus Media, the good hands of Jesus share, and follow-up will be how to operate this part of the stake is not the known.

In fact, overall, the domestic PE institutions are not yet involved in large-scale M & A transactions, mergers and acquisitions are often higher than for more complex and volatile equity investments, IPO equity market due to heat hot let M dim the glory of a lot of transactions. Pioneer status from the point of view, the local background, the background PE PE no foreign bodies in terms of mergers and acquisitions activity, the reason is that local institutions are now more willing to invest more in equity investment of energy, and foreign institutions in mergers and acquisitions more experience, which is in one of the competitiveness of the Chinese market. But looking from another dimension, PE institutions with deep roots in the investment banking institutions and the good deal more attention, such as CDH Investments strength in investment banking is very strong.

Renaissance engaged in investment banking where the founder of package that, in China, M & A market has always existed, but a few years ago the capital market is too confusing, not the seller expectations are too high, that is, buyers do not want to bid too high, compared to IPO market, the downturn much more. He believes that this year's M & A transactions will increase substantially over last year.