CLIENT SELECTION CRITERIA
We are a B2B financial consulting service company. Our clients are businesses in case of most of the assignments and individual or institutional investors in certain select assignments.
In order to earn a reputation in terms of the kind of opportunities that we bring to the investors, Apohan implements strict screening criteria in selection of business customer require private equity. Unlike bank loans, equity funding is merit based, potential bases and hence always possible. But it is not all that easy. The selection, scrutiny, due diligence, contracting and expectation norms for equity funding are the toughest.
Hence, we have designed selection criteria before bringing the small and medium enterprises (SMEs) to the investors.
The complex and rigorous merger and acquisition deals are not possible for the businesses below threshold revenue. Apohan expects a typical deal size of around INR 50 crore (7 Mn USD). The minimum deal size should be INR 10 Cr. We do not entertain companies with revenue/net worth/assets/valuation lesser than INR 25 Cr. The exception could be only those companies which can reach the label within one or two years.
TECHNICAL & OPERATIONAL CRITERIA:
The company must have experts knowledge in the products it manufactures our services it provides. It must follow the relevant technical standards manufacturing of the product. It should have a reputation for the quality of the product it makes and it should be generating repeat orders from the customers. The manufacturing process must be compliant to well accepted industrial process standards. The company should have a history of having run the company successfully in case of a company in financial distress. The management should be capable of running all the technical functions (such as projects, requirement, manufacturing, repair and maintenance, technical support, etc) and support functions (HR, IT, administration, etc) efficiently and effectively. All the necessary technical certifications, approvals, permits for the product to be sold in the various markets. We are aware that technical and operational competencies cannot be brought to the table by the financial investors.
In nutshell, it should be a highly competent and capable management on technical, operations front.
Apohan makes it a criteria that the client company must be a high growth potential candidate. There should be a handsome growth of the market of the product is making. There should not be immediate threat of substitution, replacement or obsolescence. The company should have a proper contract structure with the distribution channel. The company should not be a contract manufacturer. Its brand should have at least local reputation. The management should have a wide network of clients. The company should be meeting the criteria in the client audits. The company should be able to garner a good chunk market share. The company should be able to undertake new projects, it should be able to launch new products, etc.
In nutshell, there should be use scope for growth for the company and management should be capable of making great revenues.
The management of the company should have high degree of financial ethics. There should be no record of siphoning of Corporate funds for personal reasons. So far as possible, we would prefer the companies that have experience of working with third party directors. Apohan checks the historical record of the company and also carries out reasonable reference check while selecting a client. Also, the management must be professional and amenable to equity partnership. The company should be running with modern tools & techniques, good corporate culture, and policy set-up at least on operations front.
In nutshell, there should not be any risk of malpractice, wilful misconduct, non-performance & fraud to the investors.
The focus of the offer should be on a conclusive turnaround of the business for complete success of the growth initiative commissioning of the new project. The fund requirement for these activities might be substantial. It may reduce the degree of the control of the existing shareholders substantially. Apohan sees to that the company takes all the required funds without much regard to the dilution of the control as taking inadequate equity funding in order to keep control in the hands of the old shareholders may not be sufficient to complete all the planned activities and me not be able to generate the expected returns. We like to see from the business seller, especially the one in financial distress that more efforts are taken to increase the valuation of the company many times than on bargaining for a relatively small contentious value so long as the investor is going to put up all the money needed for a conclusive turnaround!
In nutshell, the conclusive growth for financial turnaround must be a a significant priority over retention of control in the eyes of the existing management.
SECTORS WE SERVE
SECTOR AGNOSTICS M&A SERVICES:
Our services sector agnostic. We serve all the sectors without any exception. We do not provide any services that are very core to a sector such as macroeconomic insight into future of the sector, industry , product. We carry out only secondary research about the the projections of the industry or the product. We may engage a market expert upon request by the client.
Our specific focus is on the small and medium scale industries (SMEs, new age technology companies, infrastructure companies, etc). However, we have a client base from all the types of sectors and industries.
FOCUS ON NEW-AGE TECHNOLOGY COMPANIES:
Many companies in new-age technology businesses such as blockchain, cryptocurrencies, artificial intelligence, machine learning, deep learning, immersive technologies, drones, location based services, GIS, GPS, geocoding, navigation, mobile apps, voice translators, nanotechnology, biotechnology, genetics, internet of things, big data, cloud, collaborative tech, connectivity, exoskeleton, social media, text, voice, audio, video, media communication, chatbots, Li-Fi internet, 5G interget, 3D printing, additive manufacturing, rapid prototyping, automation, robotics, green energy, hydrogen cells, biomimicry, advanced materials, battery, solar power, wind power, geothermal power, tidal power, gaming, electric vehicles, data storage, data processing, cyber security, chemical warfare, biological warfare, charging infrastructure, wireless power,near-field communications, RFID, fintech, edutech, holography, waste to power, exoskeleton, natural language processing, health-tech, gov-tech, automated vehicles, intelligence traffic management, smart cities, etc. are the future of the world and need a lot of money to take their final shape.
Also, conventional sectors such as infrastructure, construction, ports, airports, inland waterways, automobiles, shipping, railways, aviation, public transport, energy, oil & gas, coal, hydropower, natural gas, hospitality, tourism, health, metals, cement, real estate, water, education, financial services, telecom, consumer white goods, fast moving goods power, chemical, information technology, entertainment, agriculture, paper, dairy, pharmaceuticals, poultry, fishing, wood, civil engineering, mechanical engineering, electrical engineering, instrumentation engineering and defence are supplied, served & supported by many SMEs which have huge potential to grow through new projects, products or markets.
Sectors we serve
LEGAL ENTITIES WE SERVE:
We provide services to all types of companies including listed Indian public limited companies, overseas equity joint ventures of Indian companies, overseas contractual joint ventures of Indian companies, companies into foreign trade which India, foreign companies in India, Indian subsidiaries of foreign companies, multinational companies, etc. We also serve corporate structures such as groups of companies, holding companies, sister companies, foreign subsidiaries, joint ventures, bilateral agencies, multilateral agency, etc. We provide services to central societies, business trusts, and legal entity is defined under other laws such as associations of person, Hindu undivided family (HUF), etc.
However, we do not provide services to proprietorship unless it desires to convert to a private limited company. Similarly, we don’t provide services to partnership firms (except buy-side advisory). Also we do not serve the government, central state or local, unless a speciality development program is carried out under a dedicated autonomous near-private setup.
Entities we serve
WHAT WE DON’T DO
Apohan does not carry out any statutory services. A person is a strategic advisory company. Apohan can widely advertise its services it is not bound by any statute which restricts soliciting business explicit media advertising.
We carry out the statutory and compliance related services for mergers and acquisitions and similar corporate transactions with the help of our associate firms. We are also not a broker company that restricts its work to introduction of investor to a client. We have into and competencies in managing the entire equity funding transaction right from identification of the business problem, structuring of merger and acquisition deal, identification of investor, valuation, investment contract, due diligence, closer and Merger integration including post transaction hand-holding support.
Apohan has carried out market survey of around 900 small and medium enterprises since its inception by the end of 2018. It has secured four merger acquisition assignments. Before the outbreak of Corona, we were expected to sign 6 more assignments in the month of March and April 2020. We have pipeline of around 60 merger and acquisition sell side mandates from a wide variety of sectors, with wide variety of ticket sizes and from several locations in India.