The Analysis On Motives And Performances Of Infinova Merging March Networks

With the integration and globalization,the number of merger and acquisition transactions increase sharply.More and more Chinese enterprises began to focus on international market.Through overseas mergers and acquisitions,they achieved leap-forward development,and further narrowed the gap between developed countries.Mergers and acquisitions in China have been from energy and mineral resources-led into diversified technology-based mergers and acquisitions.According to PricewaterhouseCoopers' China Merger and Acquisition 2015 Market Review,the market hit a new high in that year.M & A transactions increased by 37%,trading volume increased by 84% and the market went up to $734 billion.Private equity,domestic and overseas mergers and acquisitions have achieved rapid growth.The number of overseas M & A transactions in China increased by 40% and the amount increased by 21%.In particular,China's private enterprises have actively participating in overseas M & A transactions in order to get technology and brand.At the national strategic level,Chinese President Xi Jinping announced in 2014 at the APEC summit that China's foreign investment will triple its growth to $1.25 trillion over the next decade.Therefore,more and more Chinese enterprises will plan international development strategies and actively participate in overseas M & A transactions.This paper chose a representative company in China's security monitoring industry.The research object is Infinova merging March networks.As a mediumsized technology enterprises,Infinova merging March Networks provides practical experience to domestic companies.The paper was based on case study.Through discussing the motives of M & A transactions,and analyzing the performances after the merger,the ultimate goal of this paper was to summarize the successful experiences of M & A transactions,and to help domestic enterprises in future overseas M & A transactions.After summarizing classic research and combining quantitative and qualitative analysis,this paper discussed the motives and performances of mergers and acquisitions in different angles.The first chapter is the introduction,which mainly elaborates the background,the research method,the article frame and the innovation of this paper.The second chapter summarizes the classic literatures and theories related to mergers and acquisitions.The third chapter introduces the background of the case and describes operational and financial status of both companies.In the fourth chapter,the paper analyzes the motives of this M & A transaction.By using SWOT analysis method,the paper analyzes the internal strengths and weaknesses and external opportunities and threats of this transaction.The fifth chapter analyzes the performances before and after the M & A transaction.Through financial index analysis method and economic value added method,this paper calculates and analyzes various indexes of the Infinova before and after merging Canada March Networks,and discusses whether this transaction will benefit Infinova in operational and financial performances.The last chapter is conclusions and recommendations.On the basis of summarizing Infinova's acquisition,the paper try to draw the general conclusions and provide suggestions for Chinese enterprises in future overseas M & A transactions.The results of the case study show that the main motives of M & A is to grasp the trading opportunities,expand the scale of enterprises,improve operational efficiency and enhance the core competitiveness of enterprises.As for the performances of the transaction,in the early stage,enterprise need to invest plenty of money for integration,especially when the target enterprises are under losses or heavy debts.In this period,the two companies need to adapt to each other,and the synergies effects may not be achieved.But in the longer period,the collaborative development between enterprises will be achieved,and the business will be greatly improved.The reason is that the motives of M & A transaction affect the business performances.Due to the existence of economies of scale,efficiency and synergies,M & A transactions will improve the business in many aspects in the long term despite of financial and operational pressure in the short term.Therefore,when the companies choose target enterprises and the acquisition strategies,it is necessary to make detailed assessments and plans,select and develop reasonable merger and acquisition motives analysis.Also,the companies need to consider all kinds of risk factors in the merger process.All the actions must be based on the results of risk assessments.The companies need to know whether the two companies are complementary in the production,management,sales and technology before taking merger transactions.Besides,companies should pay attention to the integration after the mergers and acquisitions.Synergistic effects after the merger and acquisition should appear if it is a successful transaction.In addition,we should carefully choose the timing of mergers and acquisitions.