Concept of M&A transactions
The activities or transactions that companies undertake to generate revenue (sales of goods, purchase of raw materials, etc) are called operational transactions. The transactions that are not operational or routine are called strategic transactions. Typically, they are of very high value; they require intensive engagement of the top management, board of directors, shareholders and other important key stakeholders. They have very long-term implications; their process is complex; they require a lot of internal & external approvals; they are costly to carry out; they are rare or rather once-only events in the life of SMEs, if at all.
The strategic transactions include capital transactions, ownership related transactions, control related transactions, financing transactions, business restructuring transactions, business transfers, important decisions, etc. For that matter, any transactions with high stakes and long-term implications are called strategic transactions. The term mergers and acquisitions (M&A) is more popular phrase for many types of strategic business transactions of this nature and is used only for convenience but technically it does not cover all such strategic transactions.
Apohan, in nutshell, carries out mergers and acquisitions and the allied activities for the SMEs in India to solve their long-term and critical funding problems in case of the the ailing organisations and fulfills the ambitions & aspirations of growth of the companies in good financial condition but lacking internal growth capital.
Typically, the small and medium enterprises are owned, managed & led by technocrats, engineers, technology and market experts. They know how to produce the best products and how to sell them making attractive profits. But, they are very less exposed to and experienced in the world of financing (exploring all types of external financial resources), even in the traditional way such as banking, let alone advanced ways such as mergers and acquisitions or equity funding!
Merger or acquisition is the last & best option of achieving conclusive business growth or financial turnaround!!! It is as important in business life as is a marriage in personal life!