"Global Commerce Strategy"

                               Since the early 1990s, India has transformed its economy into a global powerhouse. Despite recent deceleration in GDP growth, India continues to be one of the fastest growing economies in the world and has the potential to become one of the three largest global economies by 2050. India’s growing population, rising per capital income levels, rapidly expanding manufacturing and services sectors, and the associated infrastructure and natural resources requirements make it a tremendous market of opportunity for

Canadian exporters and investors. Canadian exporters and investors. The growing competitiveness of its firms—coupled with their strong desire to venture abroad—also make India an important source of strategic investment for Canada. India’s potential as a talent pool is tremendous. It is already a recognized leader in mathematics, sciences and engineering and its excellent academic institutions continue to produce a large labour force of well-educated, English-speaking professionals. But India is also a vast and multifaceted country where conducting business can be difficult. Key market challenges for Canadian companies include restrictive import and investment regulations, limitations on foreign services providers, inadequate enforcement of intellectual property rights and low transparency in the contracting process. To succeed in this complex environment, Canadian firms need access to timely and high-quality market intelligence. Concerted effort between governments and businesses to increase awareness of Canada’s strong capabilities and cost competitiveness in priority sectors is also essential.

*  Commercial Relations, 2009 :-

• Canada’s merchandise exports to India quadrupled over the last decade (compared to a decline of 12.9 percent for Canada’s overall exports), reaching $2.1 billion in 2009.

• Over the same period, Canada’s merchandise imports from India increased by about 62.6 percent, reaching $2.0 billion in 2009.

• Both direct investment in Canada from India and Canada’s direct investment in India increased sharply over their level five years ago, amounting to $3.0 billion and $601 million respectively by year-end 2009.

• Canadian services exports to India were $324 million in 2007, while services imports were $421 million the same year.

*  Market Opportunities :- 

                            The Government of Canada has identified India as a GCS priority market—based on extensive consultation with government, academic and Canadian business and industry representatives—and has developed a comprehensive Market Plan that identifies the following sectors as offering clear market opportunities well suited to Canadian capabilities and interests in the region:

1) Agriculture, Food and Beverages:-

                      Opportunities in India’s agricultural sector encompass a broad range of sub-sectors including commodities, food and beverage processing and genetics. Growth in this sector is expected to be driven by increases in middle and upper income households, increases in youth population and key lifestyle changes.

2) Information and Communication Technology (ICT):-

                        The Indian telecommunications industry is one of the fastest growing in the world. The mobile phone subscriber base is growing at rates of over 80 percent, while internet access continues to rise at a phenomenal rate with increasing deregulation, literacy levels, lower costs of PCs and an overall increase in consumer awareness. Moreover, the Wi-Max/Broadband Wireless access (BWA) market in India is poised for significant growth with the Government issuing new licenses as well as a new Telecom policy in 2009. India also has a vibrant film and entertainment industry that relies heavily on special effects and animation.

3) Life Sciences:-

  

                      While the biotechnology industry in India currently holds 2 percent of the global market, it has the potential to emerge as a global player. Some analysts suggest that India’s biotech industry, which grew by 20 percent in 2008-2009, could see revenues quadruple within five years.

4) Education:-

                  The growing dynamism of the economy and the resulting prosperity are driving demand for quality education in India. Despite India’s large network of educational institutions, the increasing demand for quality education far surpasses the supply. An estimated 160,000 Indian students study abroad each year; Canada’s share, though growing quickly, remains small.

5) Power and Renewable Energy:-

                        In order to sustain its economic growth, India is poised to increase its installed capacity five-fold within the next 20 years, offering short- and long-term opportunities to Canadian companies in all areas of the power sector. Efforts on new and renewable technologies are increasing with global emphasis on clean energy and combating climate change.

6) Transportation Infrastructure:-

                          The Government of India estimates that $500 billion will be spent in the infrastructure sector in the next decade, with the private sector playing an important role. Important opportunities exist for investors, as well as Canadian companies with international experience in project planning, engineering and implementation, feasibility and environmental impact studies and construction.

*  Government Leadership & Support :-

                       The Government of Canada will continue to monitor and influence India’s commercial policies and regulations in favour of Canadian interests, including by working closely with Canadian companies active in the market to address key barriers such as the country’s restrictive import regulations, limits on foreign services providers, inadequate enforcement of intellectual property rights and low transparency in contracting processes. New bilateral agreements on science and technology and foreign investment will help open new doors for Canadian companies, as will ongoing work to secure Canada’s place as an important gateway for Asia Pacific commerce. Canada’s Trade Commissioner Service in India has expanded with new trade offices in Ahmedabad, Hyderabad and Kolkata and additional resources in Delhi and Mumbai. Trade commissioners will continue to focus on promoting Canada as a gateway to North America, a key investment destination and a science and technology partner.

*  Market Access :-

                              Canada has a number of bilateral trade and investment policy instruments in place that are helping to facilitate and support Canadian commercial engagement in the country:

a) 2005 

• Canada-India Agreement for Scientific and Technological Cooperation

b)2009 

• Canada-India Joint Statement
• Memorandum of Understanding on Cooperation in Agriculture and Allied Sectors
• Memorandum of Understanding on Energy Cooperation

c) 2010 

• Canada-India Joint Statement
• Nuclear Cooperation Agreement (ratification and implementation pending)
• Memorandum of Understanding on Earth Sciences and Mining
• Joint Study on a possible comprehensive economic partnership agreement

"Global Marketing"

                     Global marketing is “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives".

                       

 One of the product categories in which global competition has been easy to track in U.S.is automotive sales. The increasing intensity of competition in global markets is a challenge facing companies at all stages of involvement in international markets. As markets open up, and become more integrated, the pace of change accelerates, technology shrinks distances between markets and reduces the scale advantages of large firms, new sources of competition emerge, and competitive pressures mount at all levels of the organization. Also, the threat of competition from companies in countries such as India, China, Malaysia, and Brazil is on the rise, as their own domestic markets are opening up to foreign competition, stimulating greater awareness of international market opportunities and of the need to be internationally competitive. Companies which previously focused on protected domestic markets are entering into markets in other countries, creating new sources of competition, often targeted to price-sensitive market segments. Not only is competition intensifying for all firms regardless of their degree of global market involvement, but the basis for competition is changing. Competition continues to be market-based and ultimately relies on delivering superior value to consumers.

*  Evolution To Global Marketing :-

• Domestic Marketing :-

                             A marketing restricted to the political boundaries of a country, is called "Domestic Marketing". A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets. All marketing decisions are made at headquarters.

                           The biggest obstacle these marketers face is being blindsided by emerging global marketers. Because domestic marketers do not generally focus on the changes in the global marketplace, they may not be aware of a potential competitor who is a market leader on three continents until they simultaneously open 20 stores in the Northeastern U.S. These marketers can be considered ethnocentric as they are most concerned with how they are perceived in their home country.

                        Domestic market is a large market that every nation needs. These markets are all restricted to be under control of certain boundaries in that company or country. This type of marketing is the type of marketing that takes place in the headquarters. The disadvantage that this brings is that they really don't have that much of a say of what happens within the company. In domestic markets it helps reduce the cost of competition. By reducing competition the company has a better shot of being more successful in the long run. Also if the company’s competition is not a big factor that will affect their business, they have a good shot at making prices higher and people will still purchase that product.

                       A domestic market also gets the opportunity to operate in different areas and this gives the company an opportunity to have bigger markets to advertise to. Even in Domestic markets businesses are still trying to trade with each other to promote their business to other businesses in the area. A good thing that helps out Domestic market is that they might be able to receive tax benefits, because they offer jobs to the nation and give people opportunities for work. Domestic market helps country’s out by offering more jobs bring in good business to the market and also helps with the trading around the market.

• International Marketing :-

                                International marketing is the export, franchising, joint venture or full direct entry of a marketing organization into another country. This can be achieved by exporting a company's product into another location, entry through a joint venture with another firm in the target country, or foreign direct investment into the target country. The development of the marketing mix for that country is then required - international marketing. It can be as straightforward as using existing marketing strategies, mix and tools for export on the one side, to a highly complex relationship strategy including localization, local product offerings, pricing, production and distribution with customized promotions, offers, website, social media and leadership. Internationalization and international marketing meets the needs of selected foreign countries where a company's value can be exported and there is inter firm and firm learning, optimization and efficiency in economies of scale and scope. The firm does not need to export or enter all world markets to be considered an international marketer.

• Global Marketing :-

                             Global marketing is a firm's ability to market to almost all countries on the planet. With extensive reach, the need for a firm's product or services is established. The global firm retains the capability, reach, knowledge, staff, skills, insights, and expertise to deliver value to customers worldwide. The firm understands the requirement to service customers locally with global standard solutions or products, and localizes that product as required to maintain an optimal balance of cost, efficiency, customization and localization in a control-customization continuum to best meet local, national and global requirements to position itself against or with competitors, partners, alliances, substitutes and defend against new global and local market entrants per country, region or city. The firm will price its products appropriately worldwide, nationally and locally, and promote, deliver access and information to its customers in the most cost-effective way. The firm also needs to understand, research, measure and develop loyalty for its brand and global brand equity (stay on brand) for the long term.

                            At this level, global marketing and global branding are integrated. Branding involves a structure process of analyzing "soft" assets and "hard" assets of a firm's resources. The strategic analysis and development of a brand includes customer analysis (trends, motivation, unmet needs, segmentation), competitive analysis (brand image/identity, strengths, strategies, vulnerabilities), and self-analysis (existing brand image, brand heritage, strengths/capabilities, organizational values)

                              Further, Global brand identity development is the process establishing brands of products, the firm, and services locally and worldwide with consideration for scope, product attributes, quality/value, uses, users and country of origin; organizational attributes (local vs. global); personality attributes (genuine, energetic, rugged, elegant) and brand customer relationships (friend, adviser, influencer, trusted source); and importantly symbols, trademarks metaphors, imagery, mood, photography and the company's brand heritage. In establishing a global brand, the brand proposition (functional benefits, emotional benefits and self-expressive benefits are identified, localized and streamlined to be consistent with a local, national, international and global point of view. The brand developed needs to be credible.

                       

    A global marketing and branding implementation system distributes marketing assets (website, social media, Google PPC, PDFs, sales collateral, press junkets, kits, product samples, news releases, local mini-sites, flyers, posters, alliance and partner materials, affiliate programs and materials, internal communications, newsletters, investor materials, event promotions and trade shows to deliver an integrated, comprehensive and focused communication, access and value to the customers, that can be tracked to build loyalty, case studies and further establish the company's global marketing and brand footprint.

"Nature Of Marketing"

                       

                   Marketing is important to business and non business organization. It is also beneficial to customers and society. Marketing is one of the vital functional areas of a business organization. Marketing is the art and science of getting and growing Customers by offering products/services that enhance their satisfaction. Today’s business is customer oriented. One need to Build, maintain and enhance long term customer relationship.

*  Definition :-

                          In 2008 American Marketing association gave a broader definition of marketing as follow:-

“Marketing is the activity, set of institution and process for creating, communicating, delivering and exchanging offering value that have value for customers, clients, partners and society at large.”

*  Natures :-

1.  Systematic process: -

                      Marketing is a systematic process of identifying customer need and wants; and satisfying them by designing and distributing the right products. The marketing process involves.

1. Identification of customer’s strength

2. Designing the products.

3. Fixing the right price.

4. Effective promotion of product.

5. Distributing the products at the right place. Etc.

2. Continuous process: -

                       The Marketing process is a continuous in nature. It starts with marketing research and after the sales is over, it continues with customer feedback and after sale services.

3. Ideas, goods and services: -

 Marketing is undertaken to design and sell gods and services, as well as ideas.

• ·         Marketers design and distribute tangible goods like FMCG products and customer durables.
• ·         Marketers sell services such as that of banks, airlines, hotels, insurance, etc.
• ·         Charles Revson: - of Revlon remarked ‘In a factory, we make cosmetics; in the store we sell hope’.

4. Target Markets: -

                    Marketing is concerned with target markets. One cannot sell everything to everyone. Therefore, one has to be selective in deciding the target market or buyers.

5. Customer Satisfaction: -

                     Nowadays, marketing places focus on customer satisfaction. Customer has a correlation between product performance and customer expectation. Nowadays, marketers must work towards not only customer satisfaction, but they must delight the customers by offering value added services.

6. Competitive Advantages: -

                        Effective marketing helps to face competition in the market. Professional marketers are proactive in decision making. They come up with innovative designs or models, creative promotion schemes etc.

7. Corporate Image: -

                          Effective marketing enables a firm to develop and enhance its corporate image. Due to effective marketing (right product, price..,) the firm achieves higher performance which in turn it able to develop corporate image.

8. Organizational Objectives: -

                             Marketing is undertaken to achieve organizational objectives. Commercial organization cannot survive without achieving marketing objectives. Such as increase in profits, improved brand image, increase in market share, improved corporate image, enhance customer loyalty, etc.

9. Marketing Environment: -

                             Marketing influence by various environmental factors such as customer preferences, competitors, strategies, government policies, and international environment, economic, etc., marketers should actively scan the environment regularly.

10. All Pervasive: -

                              The process of marketing is applicable not only to business organization but also to non-business. For instance, an educational institution needs to offer; the right courses (product), charge the right fees (price). Etc.

11. Societal Interest: -

                              Modern marketing intends to maintain and enhance customers and society welfare. Marketers need to achieve a balance between; profits + customer Satisfaction + Public Inter

"History Of Mergers And Acquisitions"

                          Most histories of M&A begin in the late 19th U.S. However, mergers coincide historically with the existence of companies. In 1708, for example, the East India Company merged with an erstwhile competitor to restore its monopoly over Indian trade. In 1784, the Italian Monte dei Paschi and Monte Pio banks were united as the Monti Reuniti. In 1821, the Hudson's Bay Company merged with the rival North West Company.

*  The Great Merger Movement: 1895-1905 

                                The Great Merger Movement was a predominantly U.S. business phenomenon that happened from 1895 to 1905. During this time, small firms with little market share consolidated with similar firms to form large, powerful institutions that dominated their markets. It is estimated that more than 1,800 of these firms disappeared into consolidations, many of which acquired substantial shares of the markets in which they operated. The vehicles used were so-called trusts. In 1900 the value of firms acquired in mergers was 20% of GDP. In 1990 the value was only 3% and from 1998–2000 it was around 10–11% of GDP. Companies such as DuPont, US Steel, and General Electric that merged during the Great Merger Movement were able to keep their dominance in their respective sectors through 1929, and in some cases today, due to growing technological advances of their products, patents, and brand recognition by their customers.

                           There were also other companies that held the greatest market share in 1905 but at the same time did not have the competitive advantages of the companies like DuPont and General Electric. These companies such as International Paper and American Chicle saw their market share decrease significantly by 1929 as smaller competitors joined forces with each other and provided much more competition. The companies that merged were mass producers of homogeneous goods that could exploit the efficiencies of large volume production. In addition, many of these mergers were capital-intensive. Due to high fixed costs, when demand fell, these newly-merged companies had an incentive to maintain output and reduce prices. However more often than not mergers were "quick mergers".

                         These "quick mergers" involved mergers of companies with unrelated technology and different management. As a result, the efficiency gains associated with mergers were not present. The new and bigger company would actually face higher costs than competitors because of these technological and managerial differences. Thus, the mergers were not done to see large efficiency gains, they were in fact done because that was the trend at the time. Companies which had specific fine products, like fine writing paper, earned their profits on high margin rather than volume and took no part in Great Merger Movement

*  Short Run Factors :-

                        One of the major short run factors that sparked The Great Merger Movement was the desire to keep prices high. However, high prices attracted the entry of new firms into the industry who sought to take a piece of the total product. With many firms in a market, supply of the product remains high.

                          A major catalyst behind the Great Merger Movement was the Panic of 1893, which led to a major decline in demand for many homogeneous goods. For producers of homogeneous goods, when demand falls, these producers have more of an incentive to maintain output and cut prices, in order to spread out the high fixed costs these producers faced (i.e. lowering cost per unit) and the desire to exploit efficiencies of maximum volume production. However, during the Panic of 1893, the fall in demand led to a steep fall in prices.

                          Another economic model proposed by Naomi R. Lamoreaux for explaining the steep price falls is to view the involved firms acting as monopolies in their respective markets. As quasi-monopolists, firms set quantity where marginal cost equals marginal revenue and price where this quantity intersects demand. When the Panic of 1893 hit, demand fell and along with demand, the firm’s marginal revenue fell as well. Given high fixed costs, the new price was below average total cost, resulting in a loss. However, also being in a high fixed costs industry, these costs can be spread out through greater production (i.e. higher quantity produced). To return to the quasi-monopoly model, in order for a firm to earn profit, firms would steal part of another firm’s market share by dropping their price slightly and producing to the point where higher quantity and lower price exceeded their average total cost. As other firms joined this practice, prices began falling everywhere and a price war ensued.

                            One strategy to keep prices high and to maintain profitability was for producers of the same good to collude with each other and form associations, also known as cartels. These cartels were thus able to raise prices right away, sometimes more than doubling prices. However, these prices set by cartels only provided a short-term solution because cartel members would cheat on each other by setting a lower price than the price set by the cartel. Also, the high price set by the cartel would encourage new firms to enter the industry and offer competitive pricing, causing prices to fall once again. As a result, these cartels did not succeed in maintaining high prices for a period of no more than a few years. The most viable solution to this problem was for firms to merge, through horizontal integration, with other top firms in the market in order to control a large market share and thus successfully set a higher price.

*  Long Run Factors :-

                                 In the long run, due to desire to keep costs low, it was advantageous for firms to merge and reduce their transportation costs thus producing and transporting from one location rather than various sites of different companies as in the past. Low transport costs, coupled with economies of scale also increased firm size by two- to fourfold during the second half of the nineteenth century. In addition, technological changes prior to the merger movement within companies increased the efficient size of plants with capital intensive assembly lines allowing for economies of scale. Thus improved technology and transportation were forerunners to the Great Merger Movement. In part due to competitors as mentioned above, and in part due to the government, however, many of these initially successful mergers were eventually dismantled.

                               The U.S. government passed the Sherman Act in 1890, setting rules against price fixing and monopolies. Starting in the 1890s with such cases as Addison Pipe and Steel Company v. United States, the courts attacked large companies for strategizing with others or within their own companies to maximize profits. Price fixing with competitors created a greater incentive for companies to unite and merge less than one name so that they were not competitors anymore and technically not price fixing.

"Types Of Mergers And Acquisitions"

*  The Type of Mergers and Acquisitions  role in Market :-

The M&A process itself is a multifaceted which depends upon the type of merging companies.

• A horizontal merger is usually between two companies in the same business sector. The example of horizontal merger would be if a health care’s system buys another health care system. This means that synergy can obtained through many forms including such as; increased market share, cost savings and exploring new market opportunities.

• A vertical merger represents the buying of supplier of a business. In the same example as above if a health care system buys the ambulance services from their service suppliers is an example of vertical buying. The vertical buying is aimed at reducing overhead cost of operations and economy of scale.

• Conglomerate M&A is the third form of M&A process which deals the merger between two irrelevant companies. The example of conglomerate M&A with relevance to above scenario would be if health care system buys a restaurant chain. The objective may be diversification of capital investment.

*  Arm's Length Mergers :-

 An arm's length merger is a merger: 

1. approved by disinterested directors and                 

2. approved by disinterested stockholders:

                ″The two elements are complementary and not substitutes. The first element is important because the directors have the capability to act as effective and active bargaining agents, which disaggregated stockholders do not. But, because bargaining agents are not always effective or faithful, the second element is critical, because it gives the minority stockholders the opportunity to reject their agents' work. Therefore, when a merger with a controlling stockholder was:

 1) Negotiated and approved by a special committee of independent directors; and

 2) Conditioned on an affirmative vote of a majority of the minority stockholders, the business judgment standard of review should preemptively apply, and any plaintiff ought to have to plead particularized facts that, if true, support an inference that, despite the facially fair process, the merger was tainted because of fiduciary wrongdoing.″

*  Strategic Mergers :-

                                             A Strategic merger usually refers to long term strategic holding of target (Acquired) firm. This type of M&A process aims at creating synergies in the long run by increased market share, broad customer base, and corporate strength of business. A strategic acquirer may also be willing to pay a premium offer to target firm in the outlook of the synergy value created after M&A process.

*  So-called 'Acqui-hires' :-

                           An acquisition is sometimes referred to as an acqui-hire when the acquiring company seeks primarily to obtain the target's staff, which may have expertise in a particular area in which the acquiring company sees itself as weak. This type of acquisition is common in the technology industry.

"Mergers And Acquisitions"

           

                    Mergers and acquisitions (abbreviated M&A) is an aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations.

*  Distinction between mergers and acquisitions :-

                                The terms merger and acquisition mean slightly different things. The legal concept of a merger (with the resulting corporate mechanics, statutory merger or statutory consolidation, which have nothing to do with the resulting power grab as between the management of the target and the acquirer is different from the business point of view of a "merger", which can be achieved independently of the corporate mechanics through various means such as "triangular merger", statutory merger, acquisition, etc.

                             When one company takes over another and completely establishes itself as the new owner, the purchase is called an "acquisition". From a legal point of view, in an acquisition, the target company still exists as an independent legal entity, which is controlled by the acquirer.

                            In the pure sense of the term, a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place. For example, in the 1999 merger of Glaxo Wellcome and SmithKline Beecham, both firms ceased to exist when they merged, and a new company, GlaxoSmithKline, was created.

                           In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it is technically an acquisition. Being bought out often carries negative connotations; therefore, by describing the deal euphemistically as a merger, deal makers and top managers try to make the takeover more palatable. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time.

                        A purchase deal will also be called a "merger" when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly (that is, when the target company does not want to be purchased) it is always regarded as an "acquisition".

*  Financing M & A :-

                                Mergers are generally differentiated from acquisitions partly by the way in which they are financed and partly by the relative size of the companies. Various methods of financing an M&A deal exist:

• Cash :-

                          Payment by cash. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the (indirect) control of the bidder's shareholders.

• Stock :-

                               Payment in the form of the acquiring company's stock, issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter.

• Financing Option :-

                            There are some elements to think about when choosing the form of payment. When submitting an offer, the acquiring firm should consider other potential bidders and think strategically. The form of payment might be decisive for the seller. With pure cash deals, there is no doubt on the real value of the bid (without considering an eventual earn out). The contingency of the share payment is indeed removed. Thus, a cash offer preempts competitors better than securities. Taxes are a second element to consider and should be evaluated with the counsel of competent tax and accounting advisers. Third, with a share deal the buyer’s capital structure might be affected and the control of the buyer modified. If the issuance of shares is necessary, shareholders of the acquiring company might prevent such capital increase at the general meeting of shareholders

. The risk is removed with a cash transaction. Then, the balance sheet of the buyer will be modified and the decision maker should take into account the effects on the reported financial results. For example, in a pure cash deal (financed from the company’s current account), liquidity ratios might decrease. On the other hand, in a pure stock for stock transaction (financed from the issuance of new shares), the company might show lower profitability ratios. However, economic dilution must prevail towards accounting dilution when making the choice. The form of payment and financing options are tightly linked. If the buyer pays cash, there are three main financing options:

           

A)Cash on hand: it consumes financial slack (excess cash or unused debt capacity) and may decrease debt rating. There are no major transaction costs.

B)It consumes financial slack, may decrease debt rating and increase cost of debt. Transaction   costs include underwriting or closing costs of 1% to 3% of the face value.

C)Issue of stock: it increases financial slack, may improve debt rating and reduce cost of debt.                   Transaction costs include fees for preparation of a proxy statement, an extraordinary shareholder meeting and registration.

If the buyer pays with stock, the financing possibilities are:

a) Issue of stock (same effects and transaction costs as described above).

b) Shares in treasury: it increases financial slack (if they don’t have to be repurchased on the market), may improve debt rating and reduce cost of debt. Transaction costs include brokerage fees if shares are repurchased in the market otherwise there are no major costs.

                         In general, stock will create financial flexibility. Transaction costs must also be considered but tend to have a greater impact on the payment decision for larger transactions. Finally, paying cash or with shares is a way to signal value to the other party, e.g.: buyers tend to offer stock when they believe their shares are overvalued and cash when undervalued.[

Poultry Equipment Companies Offer Reliable Poultry Equipments

                    Poultry farming has emerged as an important part of modern economy. According to the latest calculations over 50 billion chickens are raised annually in poultry farms across the globe. It is to be kept in mind that as poultry chickens

are raised especially for consumption, they are rich in nutrients and contains high food value. Poultry Equipment Companies supply poultry equipment's to farms that heavily rely on these equipment's for their day to day operations. There are different types of poultry equipment's available in the market and it is better to take the help of a professional expert before making a purchase.

*  Battery Cages :-

                            Battery cages are specially designed cages used for keeping egg laying hens. These cages are used all over the world, though in recent years the use of battery cages has been banned in some countries. However, it still remains one of the most important equipment's in the poultry industry. The hens are packed in these cages generally divided into compartments where they lay eggs. It has been argued a number of times that the unhygienic condition of the cages negatively impacts on the egg laying ability of the hens but it has never been substantiated.

*  Egg Incubators :-

                        Egg incubators are a must in the poultry farms. The eggs laid by hens are taken to the incubators and are hatched under controlled processes in order to increase the production of chickens. Modern egg incubators are generally controlled by computers and therefore offer a standard performance for a long time. The incubators are heated electrically with a thermostat, thus making it possible to regulate the temperature and the humidity within the incubator according to the requirement. However, it is important to purchase good quality egg incubators in order to get the desired result.

                       As there are many companies who are involved in the manufacturing of these equipment's, clients need to choose carefully from a wide range of options. Most of these equipment's can be purchased online as the ma

nufacturers have their own official websites where buyers can place online order to these equipment's. Poultry Equipment Companies offer different products at different prices. Hence it is important to consider more than one company before making a purchase in order to obtain the best product at the best possible price. Though buyers can take the opportunity of making an online purchase it is always better to contact the manufacturer in person in case of a bulk purchase.

"TPG Capital"

                        TPG Capital (formerly Texas Pacific Group) is one of the largest private equity investment firms globally, focused on leveraged buyout, growth capital and leveraged recapitalization investments in distressed companies and turnaround situations. TPG also manages investment funds specializing in growth capital, venture capital, public equity, and debt investments. The firm invests in a broad range of industries including consumer/retail, media and telecommunications, industrials, technology, travel/leisure and health care.

                       The firm was founded in 1992 by David Bonder man, James Coulter and William S. Price III. Since inception, the firm has raised more than $50 billion of investor commitments across more than 18 private equity funds.

                       TPG is headquartered in Fort Worth, Texas and San Francisco, California. The company has additional offices in Europe, Asia, Australia and North America.

* History and Notable Investments :-

• Founding :-

                            The Texas Pacific Group, as it was originally known, was founded in 1992 by David Bonderman, James Coulter and William S. Price III. Prior to founding TPG, Bonderman and Coulter had worked for Robert M. Bass making leveraged buyout investments during the 1980s. In 1993, Coulter and Bonderman partnered with William S. Price III, who was Vice President of Strategic Planning and Business Development for GE Capital to complete the buyout of Continental Airlines. At the time, TPG was virtually alone in its conviction that there was an investment opportunity with the airline. The plan included bringing in a new management team, improving aircraft utilization and focusing on lucrative routes. By 1998, TPG had generated an annual internal rate of return of 55% on its investment.

• Texas Pacific Group in the late 1990s :-

                       In 1997, TPG completed fundraising for its second private equity fund, with over $2.5 billion of investor commitments. In June 1996, TPG acquired the AT&T Paradyne unit, a multimedia communications business, from Lucent Technologies for $175 million. Also in 1996, TPG invested in Beringer Wine, Ducati Motorcycles and Del Monte Foods.

                     TPG's most notable 1997 investment was its takeover of J. Crew. TPG acquired an 88% stake in the retailer for approximately $500 million, however the investment struggled due to the relatively high purchase price paid relative to the company's earnings. The company was able to complete a turnaround beginning in 2002 and complete an initial public offering in 2006.

                   The following year, in 1998, TPG led an investor group in a minority investment in Oxford Health Plans. TPG and its co-investors invested $350 million in a convertible preferred stock that can be converted into 22.1% of Oxford. The company completed a buyback of the TPG's PIPE convertible in 2000 and would ultimately be acquired by UnitedHealth Group in 2004.

                     As the decade came to a close, TPG was once again fundraising, for its third private equity fund. This time, however TPG was raising not only a new buyout fund, but also a new fund, T3 Partners that would invest alongside the main fund in technology oriented investments. In 1999, TPG invested in Piaggio S.p.A, Bally International (including Bally Shoe), and ON Semiconductor.

                      TPG has also become recognized for its dedicated operations group that has become a major part of the process from investment to sale in many of their portfolio companies. The group is led by Dick Boyce and involves itself in tricky turnaround situations, operations improvement and other tasks that help create value in the company. Other major private equity firms have begun to develop operations group as well, attempting to recreate the model at TPG but most have had trouble creating as expansive a program.

• Texas Pacific Group in the early 2000s :-

                            In 2000, TPG and Leonard Green & Partners invested $200 million to acquire Petco, the pet supplies retailer as part of a $600 million buyout. Within two years they sold most of it in a public offering that valued the company at $1 billion. Petco’s market value more than doubled by the end of 2004 and the firms would ultimately realize a gain of $1.2 billion. Then, in 2006, the private equity firms took Petco private again for $1.68 billion.

                        That same year, in 2000, TPG completed the controversial acquisition of Gemplus SA, one of the leading smart card manufacturers. TPG won a struggle with the company's founder, Marc Lassus, for control of the company. Also in 2000, TPG completed an investment in Seagate Technology.

                      In 2001, TPG acquired Telenor Media, a Norwegian phone-directory company, for $660m, and shortly thereafter acquired a controlling interest in the third largest silicon-wafer maker MEMC Electronic Materials.

                     In July 2002, TPG, together with Bain Capital and Goldman Sachs Capital Partners, announced the high profile $2.3 billion leveraged buyout of Burger King from Diageo. However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, TPG and its co-investors agreed on a reduced $1.5 billion purchase price for the investment.  The TPG consortium had support from Burger King's franchisees, who controlled approximately 92% of Burger King restaurants at the time of the transaction. Under its new owners, Burger King underwent a major brand overhaul including the use of The Burger King character in advertising. In February 2006, Burger King announced plans for an initial public offering.    

                      In November 2003, TPG provided a proposal to buy Portland General Electric from Enron. However, concerns about debt and local politics led to Oregon's Public Utilities Commission regulators to deny permission for the purchase March 10, 2005.Oregon Public Utility Commission (March 10, 2005).

                    TPG ventured into the film business in late 2004 in the major leveraged buyout of Metro-Goldwyn-Mayer. A consortium led by TPG and Sony completed the $4.81 billion buyout of the film studio. The consortium also included media-focused firms Providence Equity Partners and Quadrangle Group as well as DLJ Merchant Banking Partners. The transaction, which was announced in September 2004, was completed in early 2005.

              

     Also in 2005, TPG was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. TPG's partners in the acquisition were Silver Lake Partners, Bain Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and The Blackstone Group. This represented the largest leveraged buyout completed since the takeover of RJR Nabisco at the end of the 1980s leveraged buyout boom. Also, at the time of its announcement, SunGard would be the largest buyout of a technology company in history, a distinction it would cede to the buyout of Free scale Semiconductor. The SunGard transaction is also notable in the number of firms involved in the transaction, the largest club deal completed to that point. The involvement of seven firms in the consortium was criticized by investors in private equity who considered cross-holdings among firms to be generally unattractive.

                

"Private Equity"

                         A private equity investment will generally be made by a private equity firm, a venture capital firm or an angel investor. Each of these categories of investor has its own set of goals, preferences and investment strategies; however, all provide working capital to a target company to nurture expansion, new-product development, or restructuring of the company’s opera
tions, management, or ownership.

                      Bloomberg Business week has called private equity a rebranding of leveraged buyout firms after the 1980s. Among the most common investment strategies in private equity are: leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital. In a typical leveraged buyout transaction, a private equity firm buys majority control of an existing or mature firm. This is distinct from a venture capital or growth capital investment, in which the investors (typically venture capital firms or angel investors) invest in young or emerging companies, and rarely obtain majority control.

                     Private equity is also often grouped into a broader category called private capital, generally used to describe capital supporting any long-term, illiquid investment strategy.

*  Growth Capital :-

                          Growth Capital refers to equity investments, most often minority investments, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a major acquisition without a change of control of the business.

                               Companies that seek growth capital will often do so in order to finance a transformational event in their life cycle. These companies are likely to be more mature than venture capital funded companies, able to generate revenue and operating profits but unable to generate sufficient cash to fund major expansions, acquisitions or other investments. Because of this lack of scale these companies generally can find few alternative conduits to secure capital for growth, so access to growth equity can be critical

to pursue necessary facility expansion, sales and marketing initiatives, equipment purchases, and new product development. The primary owner of the company may not be willing to take the financial risk alone. By selling part of the company to private equity, the owner can take out some value and share the risk of growth with partners.  Capital can also be used to effect a restructuring of a company's balance sheet, particularly to reduce the amount of leverage (or debt) the company has on its balance sheet. A Private investment in public equity, or PIPEs, refers to a form of growth capital investment made into a publicly traded company. PIPE investments are typically made in the form of a convertible or preferred security that is unregistered for a certain period of time. The Registered Direct, or RD, is another common financing vehicle used for growth capital. A registered directs is similar to a PIPE but is instead sold as a registered security.

*  Mezzanine Capital :-

                         Mezzanine capital refers to subordinated debt or preferred equity securities that often represent the most junior portion of a company's capital structure that is senior to the company's common equity. This form of financing is often used by private equity investors to reduce the amount of equity capital required to finance a leveraged buyout or major expansion. Mezzanine capital, which is often used by smaller companies that are unable to access the high yield market, allows such companies to borrow additional capital beyond the levels that traditional lenders are willing to provide through bank loans. In compensation for the increased risk, mezzanine debt holders require a higher return for their investment than secured or other more senior lenders. Mezzanine securities are often structured with a current income coupon.

*  Private equity in the 1980s :-

                            In January 1982, former United States Secretary of the Treasury William Simon and a group of investors acquired Gibson Greetings, a producer of greeting cards, for $80 million, of which only $1 million was rumored to have been contributed by the investors. By mid-1983, just sixteen months after the original deal, Gibson completed a $290 million IPO and Simon made approximately $66 million.

                            The success of the Gibson Greetings investment attracted the attention of the wider media to the nascent boom in leveraged buyouts. Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 million.

                             During the 1980s, constituencies within acquired companies and the media ascribed the "corporate raid" label to many private equity investments, particularly those that featured a hostile takeover of the company, perceived asset stripping, major layoffs or other significant corporate restructuring activities. Among the most notable investors to be labeled corporate raiders in the 1980s included Carl Icahn, Victor Posner, Nelson Peltz, Robert M. Bass, T. Boone Pickens, Harold Clark Simmons, Kirk Kerkorian, Sir James Goldsmith, Saul Steinberg and Asher Edelman. Carl Icahn developed a reputation as a ruthless corporate raider after his hostile takeover of TWA in 1985. Many of the corporate raiders were onetime clients of Michael Milken, whose investment banking firm, Drexel Burnham Lambert helped raise blind pools of capital with which corporate raiders could make a legitimate attempt to take over a company and provided high-yield debt ("junk bonds") financing of the buyouts.

*  Investments In Private Equity :-

                              Although the capital for private equity originally came from individual investors or corporations, in the 1970s, private equity became an asset class in which various institutional investors allocated capital in the hopes of achieving risk adjusted returns that exceed those possible in the public equity markets. In the 1980s, insurers were major private equity investors. Later, public pension funds and university and other endowments became more significant sources of capital. For most institutional investors, private equity investments are made as part of a broad asset allocation that includes traditional assets (e.g., public equity and bonds) and other alternative assets (e.g., hedge funds, real estate, commodities).

                           Most institutional investors do not invest directly in privately held companies, lacking the expertise and resources necessary to structure and monitor the investment. Instead, institutional investors will invest indirectly through a private equity fund. Certain institutional investors have the scale necessary to develop a diversified portfolio of private equity funds themselves, while others will invest through a fund of funds to allow a portfolio more diversified than one a single investor could construct.

                       Returns on private equity investments are created through one or a combination of three factors that include: debt repayment or cash accumulation through cash flows from operations, operational improvements that increase earnings over the life of the investment and multiple expansions, selling the business for a higher multiple of earnings than was originally paid. A key component of private equity as an asset class for institutional investors is that investments are typically realized after some period of time, which will vary depending on the investment strategy. Private equity investments are typically realized through one of the following avenues:

• an Initial Public Offering (IPO) – shares of the company are offered to the public, typically providing a partial immediate realization to the financial sponsor as well as a public market into which it can later sell additional shares;
• a merger or acquisition – the company is sold for either cash or shares in another company;
• a Recapitalization – cash is distributed to the shareholders (in this case the financial sponsor) and its private equity funds either from cash flow generated by the company or through raising debt or other securities to fund the distribution.