New Filters: Mergers and Acquisitions

If you are not happy with the results, please do another search

Sourav Nath | Vendor Diligence

Vendor due diligence is a key step for companies and promoters that are looking to raise funds or undertake a secondary sale, as it streamlines the transaction process in terms of timelines and costs. In this podcast, our principal associate Sourav Nath discusses some of the key benefits of undertaking a vendor due diligence, both from a buyer and seller perspectives.

Transcript – Vendor Diligence

What is the purpose of a Vendor Due Diligence Process?

The purpose of a vendor due diligence process is to evaluate and verify the target company’s financial and legal status, as well as assess any potential risks associated with a potential transaction.

How is a Vendor Diligence different from traditional Legal Due Diligence?

Vendor due diligence is undertaken by the seller whereas a legal due diligence is undertaken by the buyer;
Timing of the due diligence;
The buyer or the investor is able to identify the risk areas and focus on those during the transaction;
Legal due diligence is more comprehensive.

How is Vendor Diligence helpful for Sellers in M&A and investment transactions?

Speeds up the process;
Allows the seller rectify deficiencies in advance;
Allows the seller/ company to identify consent requirements well ahead of time;
Provides an improved valuation; and
Allows company to differentiate their offering from other potential targets of the buyer.

How would such Vendor Diligence help buyers/ investors?

Provides investors with a crisp snapshot of the company;
Enables the buyers/ investors to identify and focus on the risk elements quickly;
Streamlines the process of legal due diligence;
If required, a top up diligence can be done.

Tags Due Diligence, JSA, Leading Law Firm, Leading Lawyers, Mergers and Acquisitions, Vendor Diligence

Lineage Logistics acquires Turvo Inc.

JSA advised Lineage Logistics, LLC, world’s largest temperature-controlled industrial REIT and logistics solutions provider, on the India leg of its 100% acquisition of Turvo Inc., a leading provider of supply chain management, collaboration, and visibility software, including its India subsidiary.

The acquisition was an extension of the two companies’ long-standing partnership which includes a previous investment in Turvo by Lineage. With Lineage’s backing, Turvo is intended to continue to focus on its customers, accelerate innovation in its technology offering and expand into new and adjacent markets under its own brand as a wholly owned subsidiary of Lineage.

The transaction also involved migration of employees of target into a new SAR (stock appreciation rights) plan.

Deal Value: USD 208 million

Our Transaction Team Comrised Lead Partner – Manvinder Singh, Partner – Anant Mishra, Associate – Parnik Saxena and Pragya Pandey.

Our Tax Team Comprised Partner – Kumarmanglam Vijay

Tags JSA, Leading Law Firm, Leading Lawyer, Merger and Acquisition, Transport and Logistics

Rupinder Malik | The Regulatory and Legal Developments Dealing with M&A Transactions

The Regulatory and legal developments dealing with M&A transactions and the way forward in 2024.

The Government of India is taking relevant measures to sustain market momentum by proactively removing regulatory or and legislative bottlenecks, streamlining processes to facilitate business, and accelerate market expansions.

In this podcast, our Partner Rupinder Malik delves into some of the major regulatory developments of 2023 impacting the M&A transactions. She also envisions the way forward for 2024.

Tags J Sagar Associates, JSA, Leading Lawyers, Legal Updates, Merger and Acquisition

Budget 2024 fuels up Amrit Kaal’s M&A spirits

The specific provisions of the budget, coupled with global economic conditions, will determine the direction and pace of M&A deals in the coming year. This article merges the broad strokes of the Budget 2024, offering a holistic view of the potential impacts on India’s M&A activity. It underscores the budget’s role as a pivotal element in shaping the economic narrative. It sets the stage for an anticipated resurgence in M&A activity bolstered by strategic investments and policy reforms.

India’s mergers and acquisitions (“M&A”) activity took a nosedive in 2023. As per the data collected by Bloomberg, while 2022 was record-breaking and the deal value had reached $192 billion in India, it plunged by 63 per cent in 2023 to $70.9 billion.

Please click here to read the full article by Sidharrth Shankar, published in The Statesman.

Tags Amrit Kaal Budget, Budget 2024, J Sagar Associates, JSA, JSA Law Firm, Leading Law Firm, Leading Lawyers, M&A, Policy Reform, Strategic Investments

M&A in the Infrastructure Sector Key Legal Risks

The legal due diligence process helps in identifying the key legal risks and provides for mitigation strategies.

The Indian infrastructure sector is one of the most significant drivers of the Indian economy. It is a cornerstone for India to reach its ambitious target of being a 10 trillion economy by 2030-35. The infrastructure sector includes various industries such as power (including renewables), oil and gas, roads and transportation, railways, ports, aviation, urban infrastructure, telecom, etc. Being a “public good”, infrastructure projects in India are regulated and sector-specific regulatory bodies have been established to administer the planning, development, and execution of such projects. Development and operation of projects typically requires various regulatory approvals and compliances. Infrastructure projects also involve various stakeholders – developers, lenders, EPC contractors, operation and maintenance service providers, offtakers and in the case of public procurement and/or PPP projects, the relevant government authority issuing the tender/granting the concession. Each of these relationships are governed by appropriate contractual arrangements. The projects are usually developed and operated by a special purpose vehicle company (SPV) incorporated by the project developer for implementing the project.

Please click here or refer to the below document to read the full article by Megha Arora, published in Legal Era Online.

Tags Due Diligence, Infrastructure, J Sagar Associates, JSA, JSA Law Firm, Leading Law Firm, Leading Lawyers, Merger and Acquisitions

Groupe Astek acquires Sinergia Media Labs

JSA represented and advised Groupe Astek in its acquisition of Sinergia Media Labs Private Limited (Simelabs) and its subsidiary Goodbits Tech Private Limited.

Astek has acquired a majority shareholding in Simelabs with a commitment for a long-term partnership with the sellers. JSA assisted Groupe Astek with conducting legal due diligence on Simelabs and its subsidiary, and the structuring, documentation, negotiation and closing of the transaction.

Groupe Astek is a French global conglomerate that provides engineering services in advanced technology and IT to a wide array of industries and sectors including Energy, Aeronautics, Automotive, Finance, Transport and Telecom. This is the first acquisition by Groupe Astek of an Indian company and marks the entry of Groupe Astek into the Indian market. Simelabs is a digital solutions and services provider headquartered in Kochi, India with expertise in executing projects worldwide in the fields of business mobility, artificial intelligence, data science, machine learning, IoT, cloud, and AR/VR technology.

Our Transaction Team Comprised Partner – Archana Tewary, Principal Associate – Nikhil P. Joseph, Senior Associate – Aishwarya B Shankar, Associate – Sneha Mohanty and Company Secretary – Megha Kumari.

Tags IT, JSA, Leading Law Firm, Leading Lawyers, Merger and Acquisition

ET morning brief podcast – USD 10 billion ZEE-Sony Climax Countdown

Zee’s diverse content and Sony’s global muscle promised a Bollywood blockbuster of a merger. But the highly romanticised story takes a dramatic turn! Rumours are swirling that the $10 billion mega-merger might be off. What are the hurdles? And what went wrong in the two years?

Host Anupriya Nair tries to connect the dots with legal expert Vikram Raghani, Co-Chair of the Corporate Law Practice at JSA, and ET’s Arijit Barman in the latest episode of The Morning Brief podcast.

Please click here to listen to the full podcast.

Tags Corporate, JSA, Leading Law Firm, Leading Lawyers, Legal Expert, Podcast

NAVIGATING NEW HORIZONS: THE IMPACT OF GLOBAL ECONOMIC SHIFTS ON CROSS-BORDER M&A

The landscape of cross-border mergers and acquisitions (M&A) is continually reshaped by global economic shifts. As an advisor specializing in cross-border transactions and multinational company advisories, I have observed the distinct impact of these changes, especially from the Indian perspective.

Please click here or refer the below document to read the full article by Sidharrth Shankar, published in The Sunday Guardian.

Tags Corporate, Cross border, Global Economy, JSA, Leading Law Firm, Leading Lawyers, Merger and Acquisition

Dematerialization of shares: Mandatory for private companies

Private companies (other than a ‘small company’) are required to take steps towards dematerialization of all its securities with effect from 27 October 2023. The requirement applies to fresh issuance of securities and securities already issued by the relevant private company. This is the latest diktat from the Ministry of Corporate Affairs, which notified the ‘Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023’ (the “Amendment Rules”) on 27 October 2023 (the “Notification Date”).

Among other things, the Amendment Rules have inserted a new rule, i.e., Rule 9B, to the Companies (Prospectus and Allotment of Securities) Rules, 2014. The new Rule 9B and what it means to private companies has been examined below:

Within eighteen (18) months from the close of a “financial year” (the “Cut-off Date”), every private company other than a “small company” that intends to issue securities must issue securities only in a dematerialized form. Further, every private company must “facilitate” the conversion of securities held in physical form into a dematerialized form. Such efforts must be undertaken with immediate effect. “Financial Year” for the purpose of Rule 9B means a financial year ending on or after 31 March 2023, in respect of which audited financial statements are available.

Please click here to read the full article by Ajay G Prasad, published in Lexology.

Tags Amendment Rules, JSA, Leading Law Firm, Leading Lawyers, Merger and Acquisition, Notification Date

Arbitration clause in a purchase order prevails over a conflicting arbitration clause contained in an invoice

Please click here to download the Prism as PDF.

The Bombay High Court (“Bombay HC”) has in Parekh Plastichem Distributors LLP vs. Simplex Infrastructure Limited[1] considered two conflicting arbitration clauses and held that an arbitration clause contained in a purchase order, which sets out the terms of engagement between the parties, prevails over an arbitration clause contained in an invoice raised by a party.

Brief Facts

Parekh Plastichem Distributors LLP (“Parekh”) supplied micro silica to Simplex Infrastructure Limited (“Simplex”) pursuant to various purchase orders issued by Simplex. These purchase orders contained the terms and conditions governing the relationship between the parties and included an arbitration clause which provided that the venue of arbitration would be Kolkata.

Parekh raised its invoices after successful delivery of the micro silica to Simplex. Simplex made payment of some of these invoices, however, an amount of INR 21,78,910 (Indian Rupees twenty one lakh seventy eight thousand nine hundred ten) remained outstanding. The invoices issued by Parekh also contained an arbitration clause which provided that the venue of arbitration would be Mumbai.

Parekh sent various reminders to Simplex for payment of the outstanding sum, however, Simplex failed to make payment. Given the same, the advocates for Parekh issued a notice dated July 15, 2021 to Simplex invoking the arbitration clause contained in the invoices issued by Parekh (which provided that the venue of arbitration would be Mumbai). Simplex did not issue any response to this notice.

Parekh filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 before the Bombay HC to seek appointment of an arbitrator in terms of the arbitration clause contained in the invoices issued by it to Simplex (“Application”).

Simplex inter alia contended that the Bombay HC did not have jurisdiction to entertain the Application since the purchase orders issued by it contained an arbitration clause which provided that the venue of the arbitration would be Kolkata. The arbitration clause was unilaterally inserted by the Applicant in the invoices and could not supersede the arbitration clause contained in the purchase orders.

Issue

Whether the parties intended to be bound by the arbitration clause in the purchase orders issued by Simplex or the arbitration clause in the invoices raised by Parekh?

Findings and Analysis

The Bombay HC dismissed the Application and inter alia observed as follows:

The purchase orders issued by Simplex constituted the main agreement between the parties which contained the terms and conditions for supply of goods. It cannot be disputed that the arbitration clause contained in the purchase orders was agreed to by the parties.
In order to consider whether there is any arbitration agreement between the parties and also in order to consider what is that arbitration agreement, the intention of the parties is paramount. The parties intended to be bound by the arbitration clause in the purchase orders and not the arbitration clause contained in the invoices.
The act of Simplex in accepting the supplies made by Parekh and making payment towards the supply would not have the effect of the arbitration clause in the invoices superseding the arbitration clause in the purchase orders. There was no express agreement between the parties to override or supersede the arbitration clause contained in the purchase orders with the arbitration clause contained in the invoices.
The Supreme Court’s decision in Balasore Alloys Limited v. Medima LLC[2] considered a similar situation. In that case, the Supreme Court held that there was consensus ad idem between the parties to an arbitration clause contained in the comprehensive and all-encompassing agreement to the exclusion of the arbitration clause contained in an ancillary agreement. The ratio of this decision would apply to the facts of the present case since the purchase orders were comprehensive and contained all the terms of engagement between the parties. The arbitration clause in the purchase orders would govern the parties and not the arbitration clause contained in the invoices issued by Parekh.

Conclusion

This judgment may be of significance in cases where parties have standard form purchase orders containing an arbitration clause and subsequent documents which contain a conflicting arbitration clause. In such cases, the court will look at the contents of the documents under reference and the intention of the parties to decide which arbitration clause prevails.

This Prism has been prepared by: