In 2012 there has been a downward trend in the volume of transactions on the market of mergers and acquisitions (M & A). Compared to 2011 Russian investors decreased the number of transactions on purchase of assets of other companies by 27%, the volume of transactions has also decreased by 35%.
Among the reasons of such situation are financial instability on the global market and political uncertainty in Russia (the election of President of the Russian Federation and the opposition appearance influenced the cautious investors' decision).
Since 2007 dynamics of transactions number has a tendency to decrease. Slight growth was recorded only in 2010.
The largest transaction of the past year was the acquisition of Turkish bank Denizbank AS from Dexia by Sberbank. The transaction value amounted to USD 3.8 billion. For comparison, the most expensive deal of 2011 was a consolidation of Open Joint Stock Company Uralkali and "Silvinit" in May 2011. Its value amounted to 8.8 billion rubles. However, in Q1 2013 the deal surpassing of all transactions for the year 2012 in terms took place (purchase of TNK-BP by Rosneft for USD 54.98 billion). For comparison the total volume of transactions in the Russian M & A market in 2012 was about 1,550 billion rubles (about USD 50 billion).
It should be noted that due to the influence of the financial crisis in the Eurozone, the majority of the largest deals in 2012 was carried out in European countries and Turkey. Also it is known that investing in depreciating assets usually brings high return.
According to the Globas-i system, more than 40,000 companies ceased operations by merging / joining in 2012. In 2011 this figure was higher by 3.4%. In the current year, companies with such status were 31% of the value of 2012, which gives reason to anticipate a similar number of domestic mergers and acquisitions to the end of this year.
The current year tendency on the M & A market was the growing role of state-owned companies. In the Q1 2013 such companies made 9 deals. In April VTB continued this practice by Tele2 purchase for USD 3.5 billion, including debt.
Another feature of the Russian M & A market is rather high dependence on large transactions. For example, the deal with TNK-BP in March had 97% of the total amount of transactions for a month, and in the Q1 2013 the largest deals accounted to 90% of all transactions. Thus it can be concluded that the Russian market has a tendency to stable, but very slow growth.
Credinform Information Agency prepared a ranking of asset turnover of major car dealers in Russia. The selection of companies from GLOBAS-i system included organizations with maximum revenue in this type of business rated upon decreasing asset turnover.
Asset turnover ratio is calculated as the ratio of product sales revenue to the total assets of the balance. This indicator characterizes the efficiency of use of all available resources by the company, independently from their generation source, i.e. it shows, how many times – in our case, within 2011 – there occurs a complete production and circulation cycle, which ensures profit for the company, or how many monetary units of sold products were provided by each monetary unit of assets.
|N||Name||INN||Turnover in 2011, ml rub.||Asset turnover||Solvency index|
|1||FC Germanika Sever LLC||730569850||2,926.46||6.33||290 (high)|
|2||Trade-Avto LLC||5024106559||3,290.58||5.73||281 (high)|
|3||Kan-Avtovaz LLC||1657056820||3,507.48||5.56||250 (high)|
|4||ArtCar LLC||5262212308||2,980.14||5.08||276 (high)|
|5||Izmailovo LLC||7716521818||5,201.35||3.74||286 (high)|
|6||KuzbassBelAvto LLC||4205182782||12,621.24||2.04||245 (high)|
|7||AMKapital LLC||7708607959||25,871.82||1.95||238 (high)|
|8||Nizhegorodets Trading Company LLC||5254017367||4,373.05||1.89||233 (high)|
|9||Seyho-Motors LLC||7453048035||4,194.86||1.67||223 (high)|
|10||Saturn-R LLC||5902809279||3,718.48||1.38||212 (high)|
One should note that all companies included to the top-ten with highest turnover were assigned by Credinform Agency with high solvency index, which proves the capability of these car dealers to repay their liabilities timely and in full.
Companies that occupy first four lines in the ranking, use the invested funds in the most efficient way. That is, 1 ruble invested in assets of these enterprises in the preceding period provided from 5.08 to 6.33 rubles of revenues.
Other six companies used the invested funds less efficiently, but also received revenue within the range between 1.38 rub. and 3.74 rub. per 1 rub. of investments.
Therefore, the higher is the value of current asset turnover, the better is the use of floating assets. Its increase means the release of funds from the turnover that allows the organization to get along with a smaller sum of floating assets for securing release and sale of products or – with the same amount of them – to increase volume and improve quality of manufactured products.