Importance of Real Options in Valuation Almost every three IPOs listed in global stock markets are startups/unicorns. Most of these IPOs are not profitable, but their valuations are steep. The argument given for these high valuations is their growth potential, and with growth, these companies would find a path to profitability. From Uber to Lyft to…

Importance of Real Options in Valuation Almost one in every three IPOs listed in global stock markets are startups/unicorns. Most of these IPOs are not profitable, but their valuations are steep. The argument given for these high valuations is their growth potential, and with growth, these companies would find a path to profitability. From Uber to…

Valuing Growth Companies Using Discounted Cash Flow Model In 2008, Zomato was a young startup entering an untapped food delivery market funded by big investors. In the initial years, Zomato snowballed, generating a few million in revenue but was burning cash. Over the following decade, the company saw explosive growth, and in 2021, the company filed for an…

Why Culture Continues To Be Critical To The Success Of Cross-Border M&A Deals When any cross-border M&A happens, the sentiment is that cultural considerations are essential in making these deals (i.e., mergers, acquisitions, or divestments) succeed. Leading management consulting firms like Bain Capital found in their survey that cultural management is the single most important M&A success driver. Thus, dealmakers/Corporate development executives must…

How Panasonic’s Acquisition Of Blue Yonder Impacts Digital Outsourcing Last week, Panasonic Corporation acquired 80% of digital fulfillment and supply chain management specialist Blue Yonder, formerly JDA Software, for $7.1 billion at an $8.5 billion valuation. This deal is the subsequent significant acquisition from a Japanese company after Hitachi acquired Global Logic last month. In my view, acquisitions by…

My Evaluation Of Hitachi’s Acquisition Of Global Logic This week, we saw a marquee M&A deal announcement after Hitachi has stated that it will acquire US-based digital engineering services company GlobalLogic for $9.6 billion under global expansion plans for its IoT digital services business Lumada. This acquisition marks the biggest deal in the engineering services space and Hitachi’s…

Why Has Spin-Off Become Significant In The Post-Covid World? Most businesses, mainly large, highly diversified organizations, are continually looking for ideas to improve shareholder value by altering the composition of their assets, liabilities, equity, and operations. These activities generally are referred to as restructuring strategies. For instance, Reliance Industries had launched the process of spinning off their O2C business…

How Do Leveraged Buyouts Generate Value? LBOs refer to a commonly used financing strategy often employed by private equity firms to acquire companies using substantial debt to pay for the acquisition cost. Such deals often result in an increased concentration of ownership, and their leverage magnifies financial returns to equity. In a typical LBO transaction, the…

Why Porter’s Competitive Strategy Is More Relevant Now Than Ever? One of the biggest and most consequential business questions is why some companies are more profitable than others? When i look at successful companies globally, they have a clear strategy of choosing what not to do. In this post, i share my insights on why Porter’s competitive strategy is more…