Thursday 28 December 2017

JOINT VENTURES AND PARTNERSHIPS

A lucrative way for minimizing the risk of company expansion is to pool funding options with your competitor and form a joint venture. It can typically last for either one project or a group of projects but depending upon your investment, a joint venture might bring greater ROI and will allow you to achieve your business goals more quickly so that you can take on larger projects. Typically, at the time of expansion, most entrepreneurs face a dilemma: To differentiate themselves from their competitors, they should add a new product/service, a contract or a new market twice the size they have done before. But they require huge investment for such kind of business expansion, and there is no guarantee that this investment will pay off.
It has been seen that joint ventures are a trendy way to allocate the cost of expanding the business into new territory. A joint venture (JV) is considered to be an incorporated entity, in which each organization which is participating primarily depends for the entity’s debts and actions. However, unlike a merger, a JV is short-term and often sold or dissolved on project completion that brings both partners together. At a time, it might happen that your friend can actually be your competitor or at least, an organization is related to the same business line like supplier. Many businesses that are expanding find pooling resources with either one or more partners for creating a JV is the best way for minimizing risk while assisting each partner to boost both revenues and expertise. In any partnership whether long-term or temporary, mutual trust and compatibility might make or break the deal.
 Pros of JVs
  • The combined ROI from both venture partners is anticipated to be greater than the ROI they will be getting independently.
  • For independent small organizations, joint ventures make help them in participating on larger projects.
  • Resources from different organizations might help in achieving objectives and goals more effectively and quickly than resources from one.
  • Venture partners can get information about adopting each other’s best practices.
  • JV partners can get control on each other resources and technologies.
 Cons of JVs
  • JV partners can get control on each other resources and technologies.
  • Entering into a JV needs the resource diversion from one’s current business.
  • There are failure risks due to compatibility problems and liability for mistakes done by partners.
  • JV is unlikely to succeed if both the partners are not committed deeply to the joint operations.
Now the question arises which comes first: the opportunity of business expansion, or the JV that will help in expansion? The situation varies in either of the conditions. You may already have product prototype but cannot afford hiring technical experts required for refining that product. Or you can also form a JV for conducting R&D activities in order to reach prototype stage. Often, organization that are involved in infrastructure projects build up a JV ahead of contract bidding, so that they can market the collective strength of venture. In an event, the JV partners fail to win the contract; they may still chase other projects together. Some rising market economies need that foreign companies build JVs as a method of giving employment, training and transferring technology. Moreover, plan on achieving the same owing diligence for a merger or acquisition. So, before signing a formal contract, both the partners must prepare the ground for that contract by drafting an agreement letter that might be formalized later into a legal contract. 
Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial AdvisoryPrivate Equity,  Debt Financing and International Business Development. These Services  leverages insights,   relationships and a culture that emphasizes a strong orientation towards excellence.
For additional information on how ALCOR MNA can help you Grow your Company ,Complete the Enquiry form One of our representatives will contact you within one business day.  


Wednesday 20 December 2017

Venture Capital Deals Break More Records in Q3 2017


Quarter builds on $48bn in deals  announced in Q2 to register an all-time high of $49bn

The venture capital-backed deal industry has registered a second consecutive record-breaking quarter, as 2,362 deals were announced worth a combined $49bn. Expecting  these figures to rise by around 5% as more information become available. This follows Q2, which saw 2,512 deals announced worth $48bn, to put total deal activity in the first three quarters of 2017 at $128bn, on course to become an all-time annual high. However, these record values are being recorded by a declining number of transactions, with Q3 representing the sixth consecutive quarterly decline.Q1-Q3 2017 has seen 7,552 venture capital-backed deals announced, compared to 8,792 in the equivalent period of last year.


Key Venture Capital Deals Facts:

·         In Q3 2017, there were 2,362 deals made with an aggregate deal value of $49bn. This is the           second consecutive quarter to register record high aggregate deal  values.

·          North America saw the greatest activity in the quarter, with 939 deals announced for an                  aggregate deal value of $19bn.

·          Israel saw the greatest drop in deal activity from the previous quarter. In Q2 2017, Israel made      up 34% of aggregate deal value; in Q3, this figure stands at just 1%.

·          Series A financings made up 31% of venture capital deals in Q3 2017, while angel investments     accounted for a further 26% of deal flow.

·         Later stage venture capital deals have increased in value over the past few years. While average     series A-C financings in 2017 YTD are smaller than in 2016, Series D and later funding rounds   have hit a new record high of $98mn.

·         Deals in software account for the greatest proportion of deals (26%), but deals in internet               companies account for the largest share of aggregate deal value (26%).

·         The largest venture capital deal announced in Q3 was the $2bn financing of Grab Holdings.           Funding came from investors including Didi Chuxing, the firm involved in the largest venture capital-backed deal ever recorded.

·          The largest venture capital-backed exit announced in Q3 2017 was the CNY 9.5bn sale of              China-based Mango TV to Happigo.


2017 now seems assured to set new records for venture capital-backed deal activity, as the industry has witnessed its second consecutive record-breaking quarter. Driven by the rising number of late-stage multi-billion dollar financings – eight in Q3 alone – the industry is setting new records with increasing regularity. Increased opportunities in emerging markets and increased appetite from investors are combining to propel the venture capital industry to new heights.

The bulk of deal activity remains focused on the earlier part of the funding cycle, with angel and series A investments accounting for almost half of total deal numbers. However, deal values are increasingly being driven by large late stage financings and debt issuances. In fact, while the average value of financings up to series C have all fallen in 2017, average series D deals are at a record high, while the average venture debt issuance is more than twice as large as it was in 2015.
Source - preqin


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.


                                                                     

Paytm Acquires Nearbuy and Little, to Merge both - Expect A Busy 2018 On The M & A Front


Paytm on Wednesday announced the acquisition of Nearbuy and Little, two deals platforms that focus on local restaurants as well as commercial establishments. In a statement, Paytm said it arranged a merger of the two well-funded start-ups and made a “strategic” investment in the resultant entity for a majority stake. Sequoia Capital India, a large investor in Nearbuy (formerly Groupon India), continues to be a shareholder in the merged entity. Paytm did not say whether Sequoia sold a part of its investment in Nearbuy to Paytm Nearbuy, which was founded as SoSasta, was acquired by NASDAQ-listed Groupon Inc. in 2011.The company was later renamed as Groupon India, in 2013.In 2015, Sequoia Capital India and the current chief executive officer (CEO) Ankur Warikoo bought a majority stake from the US-based parent of the firm and named it Nearbuy.Little app (Little Internet Pvt. Ltd), on the other hand, was launched in 2015 with initial backing from Paytm, which wanted to test the waters in the hyperlocal deals business.The app started with a $50 million investment from Paytm, SAIF Partners and Tiger Global Management (SAIF is also a large minority shareholder in Paytm).


After a somewhat choppy 2017, many experts are calling for a busy 2018 in the M&A space. The Predictions and Reports suggests that the pace of M&A activity will increase in 2018, based in large part on “a combination of gradual acceleration in global economic growth, low inflation in advanced and emerging economies, buoyant asset markets and low-interest rates that continue to bolster the M&A markets.”  While there are concerns that could impact the potential increase in deal flow (such as a rise in economic protectionism or a global equity sell-off) the prevailing view is that the positive conditions for M&A activity will continue to rule the day and drive increasing deal making.

One of  M and A Experts says “The State of the Deal-M&A Trends 2018” report takes a similar view. The report, based on a survey of business executives, notes that a significant majority of respondents expect M&A deal flow to increase over the next 12 months, while deal size is expected to increase as well.  The report cites acquiring technology, expanding customer base in existing markets and expanding/diversifying products and services as the leading drivers for M&A deals.  Among other positive factors, the report notes that cash reserves are up significantly at potential acquirers, and that the primary intended use of that cash is for acquisitions.


Family-owned businesses should see an uptick in M&A interest as we move into 2018.
Buyers are always on the watch for well-run businesses with quality earnings and customer bases.  Family-owned businesses that are looking to grow should see an opportunity to acquire other businesses.  Those businesses that want to take advantage of a favourable market should start to take steps now to prepare, by working with management and advisors to get the business “in shape” for a transaction.  Several upcoming posts on this blog will discuss specific items that come up in almost every deal and steps business owners can take to prepare for a sale, such as dealing with financial statements, contracts management and HR/ERISA issues.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.



                                                                     




Fundraising for Women-Run Venture Capital Funds Accelerates



Despite remaining underrepresented in the industry, women-owned funds are securing more capital and making more deals in 2017

Women make up an average of 21% of staff at venture capital funds. This proportion falls to 11% of senior staff, and just 6% of board members at venture capital firms. However, women-owned* venture capital vehicles have seen fundraising reach new heights in 2017 YTD, as 13 funds have secured $2.4bn as of September. This is up from the $1.8bn raised by 25 women-owned funds in all of 2016, and follows a consistent trend of growing activity over the past five years. Looking ahead, there are 58 further women-owned funds in market, seeking a combined $6bn from
investors – 4% of total capital sought by the industry. Women-owned funds are also increasingly active deal makers, being involved with 510 financings in 2017 so far, worth a total of $6.4bn. The largest proportions of these were in software and internet companies, mirroring overall industry trends.


Key Women in Venture Capital Facts:

• Women make up an average of 21% of venture capital employees. At a senior level, women constitute 11% of staff, and occupy 6% of venture capital board seats.

• Women-owned venture capital funds have seen a sustained upswing in annual fundraising. Twelve women-owned funds raised $0.8bn in 2013. As of October 2017, though, 13 women-owned vehicles have secured $2.4bn.

• There are 58 women-owned venture capital funds in market, seeking a combined $6bn. The largest of these is Baidu Capital, which is targeting $2.95bn.

• In the first three quarters of 2017, women-owned funds have been involved with 510 deals, worth a total of $6.4bn. Of these, 25% were for software companies, and 22% were for internet firms.

• On a partner level, female partners have led 307 deals in 2017 so far, worth a combined $5.1bn. This is a record for both the number and value of women-led deals, and accounts for 9% of total deal activity this year.

• Funds of funds are the most active investors in women-owned funds, providing 29% of funding since 2000. Public pension funds (22%) and foundations (13%) are also significant backers.

• Almost three-quarters (74%) of funding for women-owned venture capital funds comes from North America-based investors. European and Asian investors account for 20% and 5% of commitments, respectively


The venture capital industry is undergoing a storm of controversy over the representation and treatment of women both as founders and as venture capitalists. Initiatives to promote gender equality in the industry have included high profile decency pledges and women-focused mentorship and empowerment programs. Women only represent one in five staff at venture capital firms, and one in ten senior staff, highlighting the uncommon nature of these programs, and the structural and long-term challenges they face. However, we may feel encouraged by the fact that women-owned venture capital funds have steadily become more common and more active, raising more money in the first three quarters of 2017 than ever before as well as being involved in over 500 financing rounds. At the same time, female partners at firms have already marked a record year for both the number of deals they have led, and the total size of those deals. While these developments are welcome,
it should not dilute the fact that women undoubtedly still face numerous challenges in the venture capital industry.”


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.  


                                                                     
                                                          

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Wednesday 13 December 2017

North America Sees Infrastructure Fundraising Soar


2017 YTD continues the momentum from a record-setting  2016

Renewed focus on infrastructure projects in North America has benefited the unlisted infrastructure market in the region. Over the past decade, North America-focused funds have raised an aggregate $178bn, far ahead of $119bnraised in the same period for Europe, the next largest market. Although North America-focused unlisted infrastructure fundraising experienced a gradual decline from 2013 to 2015, the region represents the largest infrastructure fundraising market in the world. 2016 was a record year for the region, with 23 funds securing $33bn in capital commitments, including the largest infrastructure fund ever closed. So far, it seems as though 2017 is on the path to continue last year’s fundraising momentum, with 12 funds having secured $20bn as of August.


Key North America Infrastructure Facts:

·          North America represents the largest infrastructure fundraising market, having raised an aggregate $178bnin the last 10 years.
·         North America is home to the seven largest firms by total capital raised for unlisted funds in the past 10 years.
·         Additionally, nine out of the 10 largest unlisted funds ever closed are primarily targeting North America and account for 19% of all unlisted infrastructure capital secured.
·         2016 was a record year with 23 funds securing $33bn. 2017 is on track to match last year’s fundraising record with 12 funds closed, securing an aggregate $20bn.
·          North America-focused funds have become more successful in their fundraising year-on-year. In 2015, 42% of funds exceeded their target size; this has risen to 75% of funds closed in 2017 YTD.
·          In fact, half of funds closed so far this year have raised 125% or more of their target size, the largest proportion tracked.
·         Currently, there are 47 North America-focused unlisted infrastructure funds in market with a combined target of $79bn in capital commitments. This includes Blackstone Infrastructure I which, with its $40bn target size, is seeking to be the largest ever infrastructure fund.


North America has traditionally represented the largest part of the unlisted infrastructure fundraising market, but activity has reached new heights in the past 18 months. The 2016 US presidential election prompted a renewed focus on infrastructure in the country, and fund managers have moved to take advantage of the perceived opportunity this represents.

Looking ahead, there are several multi-billion dollar funds currently seeking capital to deploy into projects in North America, including Blackstone Infrastructure I, which is seeking to be the largest ever infrastructure fund. With the deal making environment in North America showing long-term growth, and vying with Europe to become the most active region for infrastructure investments, the prospects for managers to deploy capital in the coming months are promising.”


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.  



                                                                     
                                                                http://www.alcormna.com