‘Look Beneath The Headline” Ajay Piramal’s Secret Sauce For A Successful M&A

Yes, we are open to it. And now just recently the board did announce that we've done an acquisition. Again, this really fits into our strategy. The way we do it, I think it'll be consummated in the next few months. Again, it is a brand. I think what we it is a generic brand but it is a very it is again complex and it is a niche market but it is a good brand in that.

And again it helps us because this is what we always believed in. You need the brand, we have the manufacturing capabilities or we have associations with other where we can get it manufactured. We have the sales and distribution and the customer relationships. So this just means that we can do it at a much lower cost than leverage.

So when we bought it and we entered into pharmaceuticals and kept growing, there was never the intention of exiting it. The way the reason why we exited is because I think I like to take a dispassionate view. I look upon ourselves as really trustees. Trustees for the benefit of shareholders, of employees, customers, and society. And when we got the offer that we did from Abbott and you name the multiples which is the highest ever in any generic branded generics anywhere in the world. We felt that and when we did all the calculations of what is the future value, how much we will grow, how much is the NPV today, we felt that we could not have matched it and it was in the best interests of our shareholders as well as employees because that was a high when India was actually at a high just after the global financial crisis and we didn't expect I didn't think that it'll continue and actually if you see the time also it's not continued in what it was and therefore we have to take a dispassionate view of things and do what is in the right interest.

So in generally we believe that by 2030 we should be doubling our sales to about a $2 billion sales. I think EBITDA we expect to be at least a multiple three times and we'll get a yeah that that'll be what it will be.

Which is more and 25% EBITDA so I think that should be a good yeah.

I think the lesson which I know is that one must have the what is the strategy ahead or what's the vision that you want to build and therefore then look at a M&A target. You know my biggest concern sometimes is that M&A looks very nice and everybody wants to do it but only 70 I think probably 75% they say of M&As don't succeed because you usually overpay. So we believe that first there should be a really strategic fit and there should be a vision behind it. The second thing is that we have to really go beyond the headlines. You know that's where I find that you can create value. So when we bought let's say when we enter into pharmaceuticals that was not the time to enter pharmaceuticals and especially an MNC the costs were high their growth rates were not good and everybody that's why no no big pharma ever wanted took interest in Nicholas. So again so you have to be different.

As far as the MNC was concerned is they were not for India because there was no patent there was the DPCO yes so it was there was a price control order and then you're not sure of your IPRs yes and therefore it was nice they wanted to sell low here wanted to buy so that was a time we felt that there was an opportunity that the market would grow and we could create value and the main thing was that brands made a difference which people were not appreciating.