Presented By: Arpana

CONTENTS

Deal Summary

Valuation & Justification

Filter Criteria

Due Diligence

Communication

FROM A MERGER TO AN ACQUISITIONStrategic Deal - String of Pearls

Buyer Seller Relationship – Mutual Consent

Cash and Stock Deal - $350 Million Valuation

Rational for Acquisition• Positioning• Gap Filling• Diversification• Economies of ScaleCommon Investors• Tiger Global – US based hedge fund & private equity firm• Accel Partners – US based venture and equity firm• Sofina – Belgian based Private Equity firm

Group No.

4

VALUATION & JUSTIFICATION

Price paid by the Flipkart: $350million.

Share swap process: Tiger Global Management, Accel Partners and Sofina Capital get more shares in the merged entity.

Price to revenue multiple: 10X times the revenues.

Myntra Flipkart

No. of registered users 8million 18million

No. of products on stock

60,000 10 million books

Annualized revenues 1,200crores(approx.) 3,355crores(approx.)

Myntra attained 45% of market share in fashion lines.The combination added 600 brands making effective sales 1.5billionUSD

FILTER CRITERIA MARKET SEGMENT

FLIPKARTElectronics,

books

MYNTRA

Apparel (>50%)

Deal was an added vertical to

the line of business

Apparel business expected to grow from 3 billion to 50 billion hence a prospective sector of business

SYNERGY

Cost optimization – by using common

resources as they have common

vendors

Operational synergy – by increasing

market share and becoming more

dominantIncreasing sales – through cross selling, up selling i.e. selling apparel higher profit margin

Flipkart merger – a growth merger for Myntra

Launch of first online personalized style service, more brands under private labels and foraying into

premium designer collection

6

DUE DILIGENCE FOCUS• Legal Contingent Liabilities, Bs. Ownership and Rights• Business Profitability, Discount Structures• Strategic Integrations Costs, Cultural Fit• Operational Integration of Brands, Sales & Marketing divisions• HR Key employees, Comp. & Benefits

Reason

• Essential factors for benefits from synergy and strategic & competitive advantage

Suggested Negotiation Clause

• No identifiable negotiation technique• Negotiation clause – Management role

COMMUNICATION

Dates

• Announcement – 30 January 2014• Closing – 22 May 2014 (Prior To Signing The Deal)• Reason For Gap – Negotiation Between The Companies

Strategy• Optimistic Outlook Outlining The Synergies Created• Strengthen Its Position As Largest E-commerce Platform• Future Functioning Of The Companies• Designation Of Myntra CEO• Highly Complementary Nature Of Both The Companies• Catering To Rising Demand For Online Lifestyle Products• Brief On Both The CompaniesAddressed To Its Customers, Employees And Media

PremiumThe Premium Details If

Paid Has Not Been Disclosed

SynergyCost Based &

Revenue Based

IntegrationStrategy – Change

Management – Change

Entity – Change

Integration Has Been Successful

Myntra Has Been Able To Launch New And Better

Products But The Bottom Line Result Is Too Early To Be

Judged Upon

INTEGRATION

THANK YOU