Mergers and Acquisitions: The talent Network and the Red Child "sale" venture and the subtle game of VC

Intermediary transaction SEO diagnosis Taobao guest Cloud host technology Hall

Introduction: The recent uproar over the Chinese Talent Network acquisition event has officially fallen, but rumors of 30 million dollars below the amount is far less than 200 million U.S. dollars of investment, and the 2012 red Children's mergers and acquisitions prices are not satisfactory, the earlier merger of the DMG is still in court do not know when the verdict. By the impact of the economic cycle, with the Czech Republic of technology to complete the "lightning" sale, what these mergers and acquisitions have in common, and what can be borrowed from the entrepreneurial experience? The investment community will analyze the controversial several recent years of the VC/PE investment background of the acquisition "cloud" ...

The Riddle of the Chinahr: seven years of profitable "Fighting Beast"

The recent uproar over the acquisition of China's elite network has officially fallen, with the Irish Dragon Group announcing that it has signed an acquisition agreement with the US Monster Company, which Chinahr chinahr.com into its business in China. Monster retained a 10% per cent stake in the merged company.

Prior to the takeover, China's network of talents experienced a tumultuous period of nearly two months, including speculation about layoffs and selling prices, although the amount of the final deal was not disclosed, but the closest deal was below $30 million trillion.

The first to invest in Chinahr is today's capital, and its founder, Xu, also served as chairman of the company.

Since 2005, Monster, the US recruiting giant, has started injecting capital into the Chinahr, which amounts to $50 million trillion, accounting for 40%. At the beginning of 2006, Monster 19.9 million dollars to acquire 5% of the shares. and signed a three-year listing of the gambling agreement. 2008 Monster again 174 million U.S. dollars to acquire Chinahr remaining 55% shares, at that time to the Chinese elite valuation of 316 million U.S. dollars, monster to Chinahr total investment of 2.43 dollars.

After 7 years of cooperation, the performance of China's Network of excellence has been at a loss, the third quarter of last year, monster net loss of 194.2 million U.S. dollars, from the loss of Chinahr to 233 million U.S. dollars, eventually monster end up with a large discount to the way out. At the same time, the impact of the Chinahr itself also includes a large number of staff layoffs, multiple management changes and the future direction of development and other issues. Have to say, a once in the Internet field shining Star Enterprises fell.

And for chinahr years of failure, the outside analysis has a variety of reasons, including executive appointment, sales organization, promotion strategy, more targeted at CEO Robing.

Chinahr former insiders have said that in 2008, Chinahr was monster acquired after a serious loss of middle-level, sales team has been cut off nearly half.

Robing, who has been the financial COO of AIG and the Hong Kong Association of Friends, has been questioned about the lack of understanding of the online recruiting industry, which has been reduced in sales commissions and sales costs, which has hit sales people and Chinahr has begun to introduce high salaries to large numbers of executives.

Chinahr founder Zhang Jiexian says Chinahr's most important assets, brands, employees and databases have been lost. "We have also finally abandoned the idea of repurchase again," he said. "The future of Chinahr will be the question of the takeover of the Irish Dragon Group," he said.

Red Child: The decision game between founder and investor

On September 25, 2012, Suning announced a full purchase of red children at a price of 66 million dollars.

Red children had four rounds of private equity financing, a total of 80 million U.S. dollars, the Northern Lights, NEA and Triumph Venture is the main investors of Red children, a total of more than 60% of the equity, other investors also include GGV Capital, Grace Investment and Cybernaut investment. According to the media, in addition to the book announced the funds, the Red Children's founding team also privately to shareholders to borrow 90 million of dollars.

Unlike the Chinahr, the red child is more of a disagreement between investors and founders than the failure of the strategic route.

Red Child was founded in 2004, the establishment of the DM Direct sales model in the Chinese market in the glorious period, the first year to achieve revenue of 6 million yuan, the second year 40 million Yuan, the third year 120 million yuan, the fourth year 400 million yuan. 2008, Red children have 16 branches nationwide, the number of distribution team nearly 2000 people, the first revenue breakthrough 1 billion yuan.

The 2006 red children completed the second round of financing, the Northern Lights and NEA again invested 3 million U.S. dollars, the proportion of shares from 30% to 50%, founder Li Yang and Yang invited Shanxin as CEO of the company, responsible for communication with investors and the outside world, Li Yang and Yang as the Executive director. But in October 2008, Mr. Li and his wife, the founder of the company, were asked to leave their red children at once, largely because of disagreements with Xu Peixin over the company's development strategy.

For the 2008 is gradually hot e-commerce market, the scale has become a number of enterprises in the eyes of the key words. Li Yang insists on doing fine mother and child business, the key to consider is how to make money, and Xu Xianxin insist on the first big, red children before the senior executives revealed, Xu Xianxin in the meeting, according to the annual birth of the law calculation, the mother and child industry will soon see the ceiling, red children want to grow better, must turn to other categories, This view has also received the approval of the capital side.

Under the goal of seeking scale expansion, with the departure of Li Yang, Xu Xianxin led the red children in the retail, media, logistics and finance in the four areas of accelerated expansion, but this series of measures instead of making corporate losses more serious.

Red Children in recent years the decline in performance and stagnation: 2009 sales 1.1 billion, 2010 sales of 1.5 billion yuan, 2012, the red child sales of about 1 billion yuan.

In the first half of 2012, red child revenue fell 33% from a year earlier, with a negative gross margin. And then the red children want to raise more difficult, the old investors are not willing to pay, and finally chose to sell to Suning.

In the peer, supplier and Li Yang's eyes, suning to 66 million dollars to buy red children "is a good price", and even some people think suning "buy expensive."

Many of the red children's old employees said that the founder of Li Yang, such as the departure of the company morale the starting point. Li Yang's evaluation is, "Lao Xu represents a kind of investor culture, our company's middle-class party, said the red child finally died in the CEO dream Experiment." ”

China sees merger DMG lawsuit: financial report fuse business Reorganization Advantage loss

DMG was founded in 2002, is a Metro digital media network operator, October 2009, The outdoor digital media operator China Media announced 160 million U.S. dollar price mergers and acquisitions DMG, China saw the first payment of 100 million U.S. dollars, the remaining two of the 30 million U.S. dollar should be paid in the first year of the transaction and the anniversary of the second year. Then is this second fund, but let the media, DMG and investors into many years of litigation disputes.

DMG has completed four rounds of investment, the first round in 2004, from the Gobi investment of more than 2 million U.S. dollars; in February 2005, the Gobi, Japan and DoCoMo to the DMG injection of 6 million U.S. dollars; in December 2006, DMG third round of financing, access to Gobi, Oak Capital, Sierraventures, Nifsmbcventures A total of 32.5 million U.S. dollars, 2009, Gobi and Oak Capital investment of 30 million U.S. dollars, DMG completed four rounds of 70 million U.S. dollars financing, Oak Capital and Gobi became the first two major partners DMG.

Since December 2007, Cao Jiatai, co-founder and partner of the Gobi, also personally served as the CEO of DMG.

Everything seems to be going very well, but after a year of trading cooperation, a dramatic change took place, December 29, 2010, the Chinese media in the United States court to the DMG lawsuit, accusing its shareholders and management of financial fraud, resulting in China to see the media to 160 million U.S. dollars for the virtual high price purchase of DMG assets.

The Chinese media will, together with its wholly-owned subsidiary, Visionbest the New York County High Court of New York to sue Gobi Capital, Oak Investment, Sierra Investment and other unnamed co-defendants, through false and deceptive misleading Chinese media that the results and performance reports of the digital media Group are good, So exaggerated the purchase of the target, several defendants to obtain a very lucrative profit. China sees the media refusing to pay the remaining 60 million dollar balance, and has filed a huge claim.

The latest advance in the lawsuit is the approval of the two VCs, the Gobi investment and the Oak Capital application for seizure of the 60 million dollar assets of the Chinese media. China, according to media, will continue to appeal.

Economic Observer reported that the dispute between the two sides focused mainly on October 14, 2009, the two sides jointly announced the acquisition of a day before a financial report. Public information shows that DMG2009 January-August Management report, the first 8 months of DMG net income of 104 million yuan, net profit of 50.1 million yuan. However, November 24, 2009, the financial report by the Ernst and the US audit showed that the net income of DMG was 66.8 million U.S. dollars in the first 8 months, and that it was 180 million yuan. Compared to the management report, the reported loss after the audit expanded to more than 3 times times the original. and Gobi investment related personage thinks, its difference mainly comes from the accounting calculation criterion is different.

The divergence of data on earnings reports has become the main contradiction between the two parties, but the Gobi investment authorities have pointed out: "The Chinese media in October 2009 began to do due diligence, such a major acquisition, it is not possible that the company's financial is not clear." "In fact, despite the financial problems, Limin, Chairman and CEO of China Media Board, finally admitted that the merger of DMG was a failed business."

As the main public transport system of the Chinese media, mergers and acquisitions DMG mainly optimistic about its resources in the subway ads, "the purchase of DMG Price is 160 million U.S. dollars, and Shanghai Subway TV contract is 5 years 830 million yuan, equivalent to 166 million yuan per year of user fees." Business growth still cannot offset costs. "Limin said. In the recent Chinese media restructuring decisions, the Chinese media also terminated the DMG prior to the Shanghai Subway Mobile Light and light holiday advertising business rights agreement, to enter into a new contract. Thus, the successor resources advantage of DMG has gradually disappeared.

The merger and acquisition of the same technology dream

On the way to the listing of enterprises, with the Czech technology is a bumpy company experience. In 2006, the same technology had planned to list overseas by red-chip mode, but it failed to go abroad because of changes in policy, and the IPO application in 2009 was not released by the board; value to 2012, the same technology completely abandoned the listing, the choice of mergers and acquisitions, January 2013, Into the fly integration to be no more than 544.7432 million yuan acquisition of Shanghai with Czech Technology Co., Ltd. 87.86% equity.

With the Czech science and technology behind the VC/PE investor team is also very strong, the current Czech technology with 8 of the company's shareholders are VC/PE, including Fortune Ventures, China Branch Investment, create the east, the advantages of capital, the total investment amount of more than 68 million yuan. 2009, before the GEM listing application, Zhejiang us, Fortune Finance and investment, Lehndi venture investment, such as multiple capital by means of increased investment.

For the same technology why the IPO difficult to pass, the media according to the prospectus, including the lack of business growth, brain drain and so on, the introduction of too much PE has become too complex ownership structure of the query, and the overall more than 60 million yuan of investment capital, also accounted for its proposed listing of 1/3.

In the case of the IPO audit queue, this kind of mergers and acquisitions in the current market environment everyone began to consider the way out, industry experts said, in the IPO regulation tightening background, VC/PE through the IPO exit will become more and more difficult, but the merger and reorganization may set off a climax. This year, investment institutions are expected to rely on mergers and acquisitions to invest in the climax of investment and exit opportunities, the case will be more and more exit through mergers and acquisitions.