The year 2011 could see new financial models of mergers and acquisitions ( M&As) emerging in the market that could help distressed companies in the West get a new lease of life. Global M&A firm Worbus expects to divert $ 1 billion by way of foreign funds into India over the next one year through its tie-up with Alcor Advisors, an investment firm that provides advisory services for medium to large enterprises through this route.
Worbus is considering acquiring distressed mid-segment US companies and marrying these to Indian companies with strong technology. The buy out fund will be managed by Worbus out of India, George Molakal, CEO, Alcor Advisors and board member, Worbus International said. ?This is a new financial model that we are attempting that is designed to manage and monetise distressed companies. The focus will be on acquisition of western companies lower than book value, marry these to companies with sound technology in India, rejuvenate these and exit at an appropriate time, he explained. Alcor?s $1 billion fund has been set up for emerging markets, including India and China, where 80% of investments would come into India and the remaining funds would be used for companies in China.
The buy out fund, that is expected to be launched in April next year, will initially begin with a capital base of $ 500 million to eventually scale upto $ 2 billion, Molakal said. ?Global investors are ready with funds to invest in India. There is a shift in strategy in favour of India. India will throw higher opportunities in future,? he said.