Harsh Agrwal: Indian firms can match up to MNCs
Emami' s Director tells Forbes india that losing the bid for Paras Pharma is not a setback.
January 04, 2011 / 11:21 IST
By: Samar Srivastava/ Forbes India
Emami' s Director tells Forbes india that losing the bid for Paras Pharma is not a setback
Harsh Agrwal
Age: 34 years
Designation: Director, Emami
Education: B.Com, St. Xaviers College, Kolkata
Career: Started in the marketing department at Emami
Interests: Watching movies and reading
In the recent sale of Paras Pharma there was a feeling that the price Reckitt Benckiser paid was high. Emami on the other hand had agreed to pay even more and you persisted with the bid till the very end. Just a few years ago you had acquired Zandu Pharma at a much lower price. How come you were comfortable with agreeing to pay so much?There are two or three things. If you look at the valuation from the point of view of the sales multiple [Reckitt paid eight times of sales eventually], that is not the right way to look at it. This is because the multiple would be different for different categories like, say, detergents or toothpaste due to, say, the margin or competition in that category.
For us, the multiple is based on what we think we can derive out of that company in terms of extra synergistic benefits or initiatives you can take to improve the company performance by reducing costs, increasing sales and so on. Every acquisition is very different from each other. The circumstances are different, the strengths are different and so we cannot compare one with another.
There is no doubt that the Paras acquisition would have been more expensive than Zandu but there are not a lot of opportunities available in India. It is a question of supply and demand.
Why did the deal go Reckitt Benckiser
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
