In the talk "M&A - Opportunities for Vietnamese businesses in the integration era" held by Ho Chi Minh City Union of Business Association (HUBA) at the end of last week, Do Vu Trung, Diana's former Deputy General Director, said that the most important thing is to prepare an M&A strategy correctly from the beginning.
In particular, the first step is to have a strategic partner review your business’s finance. In Diana's story, we chose a top-three US financial corporation to help Diana restructure the company and build the KPI system so that the management board can hold the company's data and confidently present it to the investors.
The next step is to strengthen the company’s staff structure and increase marketing investment to rank among the top three market shareholders, thus enjoying the favourable position to negotiate with investors.
Another secret to increasing business value is to increase the package. In 2008, when Goldman Sachs invested about US$10 million in Diana, its value at that time was only US$50 million.
Investors helped Diana optimize the process and raise its business value by increasing the package for sale. By then, two main product lines of Diana are sanitary pads and diapers, which are not worth much in the event of M&A.
"We have invested in Tisil Paper, a completely different field, with the total investment of more than US$20 million. This increased the M&A transaction value to nearly US$70 million. After that, Goldman Sachs build strategies with us and calculate to improve profits. When Unicharm came, our profit had increased to over US$220.5 million after five years. This is a notable success thanks to the strategic investors, consultants and the internal strength of Diana," Trung revealed.
Often, when foreign investors come, they first replace the personnel, but Diana was proactive to retain its apparatus. "Human resource is a delicate issue, depending on the culture of the investors and our negotiation styles," Trung said.
According to Diana, the firm had to change the President as 95% of the company was sold, but all the senior executives and department heads remained; the Japanese side only appointed their chief financial officer and marketing director. They also thoroughly study on including their name on the label.
Diana has grown by 400% after M&A, thanks to efforts in business operation and brand development.