Refers Economy Watch
Tey Por Yee, Malaysian, better known as Larry Tey, is owner of Nexgram Group. The entrepreneur turn venture capitalist has managed to serve investors from Australia, Hong Kong, Singapore, China and Indonesia, including business advisory, deal structuring and funding facilitation. In year 2012, Larry brought his investors to Malaysia, instigated by International banker for "a call of duty to his nation".
The experience and services Larry learn from International clients especially in corporate dealing such as merger & acquisition, have made an entry mark on a small market with mere 26 million population called Malaysia. The emergence of Larry into the corporate scene, although is a fly in the ocean especially compared to the deals size he arranged for his clients in China and Indonesia, have made a small name for himself as fresh blood to the aging Bursa Malaysia, the Malaysia stock market.
Larry's principle of business is not new in corporate world - invest in small companies, restructure, turnaround or acquires complement or new growth businesses or companies, and create value for stakeholders, including general investors, major shareholders, employees, clients and suppliers, and the country. Capital raised were invested into growing businesses, eventually shall provide jobs, wealth and taxes. The aging company called Nexgram was an example many corporate leaders grow their business in the 70's, 80's and 90's. The company was restructured to diversify from telecom services into full fledged player in surveillance, telecom engineering, property and investments.
History of Merger & Acquisition
Tracing back to history, merger and acquisitions have evolved in five stages and each of these are discussed here. As seen from past experience mergers and acquisitions are triggered by economic factors. The macroeconomic environment, which includes the growth in GDP, interest rates and monetary policies play a key role in designing the process of mergers or acquisitions between companies or organizations.
First Wave Mergers
The first wave mergers commenced from 1897 to 1904. During this phase merger occurred between companies, which enjoyed monopoly over their lines of production like railroads, electricity etc. the first wave mergers that occurred during the aforesaid time period were mostly horizontal mergers that took place between heavy manufacturing industries.
End Of 1st Wave Merger
Majority of the mergers that were conceived during the 1st phase ended in failure since they could not achieve the desired efficiency. The failure was fuelled by the slowdown of the economy in 1903 followed by the stock market crash of 1904. The legal framework was not supportive either. The Supreme Court passed the mandate that the anticompetitive mergers could be halted using the Sherman Act.
Second Wave Mergers
The second wave mergers that took place from 1916 to 1929 focused on the mergers between oligopolies, rather than monopolies as in the previous phase. The economic boom that followed the post world war I gave rise to these mergers. Technological developments like the development of railroads and transportation by motor vehicles provided the necessary infrastructure for such mergers or acquisitions to take place. The government policy encouraged firms to work in unison. This policy was implemented in the 1920s.
The 2nd wave mergers that took place were mainly horizontal or conglomerate in nature. Te industries that went for merger during this phase were producers of primary metals, food products, petroleum products, transportation equipments and chemicals. The investments banks played a pivotal role in facilitating the mergers and acquisitions.
End Of 2nd Wave Mergers
The 2nd wave mergers ended with the stock market crash in 1929 and the great depression. The tax relief that was provided inspired mergers in the 1940s.
Third Wave Mergers
The mergers that took place during this period (1965-69) were mainly conglomerate mergers. Mergers were inspired by high stock prices, interest rates and strict enforcement of antitrust laws. The bidder firms in the 3rd wave merger were smaller than the Target Firm. Mergers were financed from equities; the investment banks no longer played an important role.
End Of The 3rd Wave Merger
The 3rd wave merger ended with the plan of the Attorney General to split conglomerates in 1968. It was also due to the poor performance of the conglomerates.Some mergers in the 1970s have set precedence. The most prominent ones were the INCO-ESB merger; United Technologies and OTIS Elevator Merger are the merger between Colt Industries and Garlock Industries.
Fourth Wave Merger
The 4th wave merger that started from 1981 and ended by 1989 was characterized by acquisition targets that wren much larger in size as compared to the 3rd wave mergers. Mergers took place between the oil and gas industries, pharmaceutical industries, banking and airline industries. Foreign takeovers became common with most of them being hostile takeovers. The 4th Wave mergers ended with anti takeover laws, Financial Institutions Reform and the Gulf War.
Fifth Wave Merger
The 5th Wave Merger (1992-2000) was inspired by globalization, stock market boom and deregulation. The 5th Wave Merger took place mainly in the banking and telecommunications industries. They were mostly equity financed rather than debt financed. The mergers were driven long term rather than short term profit motives. The 5th Wave Merger ended with the burst in the stock market bubble.
Hence we may conclude that the evolution of mergers and acquisitions has been long drawn. Many economic factors have contributed its development. There are several other factors that have impeded their growth. As long as economic units of production exist mergers and acquisitions would continue for an ever-expanding economy.
Malaysia as a growing economy is at the cross road between regulation and deregulation, to stimulate growth. An obvious result of shrinking number of public listed company and extreme concentration of wealth towards the top 5% of entity at the cost of 95% majority in the bottom would tell the story if the country is at the right path. Perhaps the dead end would cause more "privatization", equivalent to the death of capital market. The market hass evolved so awkward, that general investors are questioning why empty company such as special purpose acquisition company (SPAC) are allowed to list and stays "empty", while small suffering companies are regulated to the death in the search of conceiving value for investors, especially minorities.
Without nurturing and facilitating growth by encouraging merger & acquisition, the aged capital is moving towards a dead end. Like many fore bears, young entrepreneur are leaning to adapt the market condition, or perhaps when time comes, might be game changer and rule setters to shape the future. Right now is still too early to tell if they could drive through the hurdlers and bring the country to the next level.
History repeats, the direction is clear. Matter of time, evolution shall plays its role, or else revolution shall takes its place. Perhaps for Larry Tey's Nexgram, it's still a first step toward building an International company like Cisco, Oracle, or even Berkshire Hathaway.
References:
http://us.practicallaw.com/0-502-1894?q=&qp=&qo=&qe=
http://www.bakermckenzie.com/files/Uploads/Documents/MA_Guide_.pdf
http://www.thestar.com.my/Business/Business-News/2013/04/16/Bursa-attracting-special-purpose-acquisition-companies/?style=biz
Seasoned players of M&A:
http://en.wikipedia.org/wiki/Li_Ka-shing
http://www.biography.com/people/warren-buffett-9230729
Fortune 500 growth by M&A:
https://www.cbinsights.com/blog/oracle-mergers-acquisitions-2008-2014/
http://en.wikipedia.org/wiki/List_of_acquisitions_by_Oracle
http://www.cisco.com/web/about/doing_business/corporate_development/acquisitions/ac_year/about_cisco_acquisition_years_list.html
Wednesday 3 December 2014
Tuesday 7 October 2014
Larry Tey, the answer to an old aged Bursa Malaysia?
Singapore (GMT+8), Asia Pacific Investor Briefing
Update 6 April 2015
Larry Tey Por Yee (Larry), a businessman turn venture capitalist, whom global venture named him the sugar daddy to hundreds of darlings, thanks to his reportedly seed funding to few hundreds companies globally. Many of which are start ups, some are even his clients, suppliers and young entrepreneur, whom he met and joint invested with other passionate venture capitalist, a bold risk many Asian entrepreneur would not take, especially to invest in other entrepreneur.
Today, Larry's work is more towards corporate dealing, such as merger & acquisition, restructuring, business advisory and general investments. He is also reportedly devoted him time in social affairs, including consistent contribution to charity, education and human science researches.
One of Larry's investee once told a financial journalist "Those managers who graduated from Larry's training would be a tough entrepreneur and survivor. He is generous and humble to groom new blood with full effort, its some what over stretched yet adventurous. He is like using cookie cutter formula to reproduce entrepreneur. Something Asian market cannot provide".
Larry was called on duty to bring back his investments to the country (Malaysia). In year 2012, he came into Malaysia corporate scene as a white knight to bail a Malaysia businessman out of hostile situation. Ever since, he had invested in few more public listed companies, added more life to the capital market.
Malaysia stock market, now called Bursa Malaysia, is virtually dead, or walking towards it's old age, which is few steps away from the graveyard. With the business tycoons in the 80's and 90's retired from corporate scene, so as the care takers and facilitators in Bursa and capital market, there is virtually not many fresh blood in the market to encourage healthy market growth. The new generation of businessman needs to be facilitated and nurtured towards building wealth and jobs for the country. However, where are the next generation trend setters and game changers? What went wrong?
Started since 90's, talents from Malaysia were either study-and-stayed back overseas, or migrated. Waves of young entrepreneurs were reluctant to come back to the country, and many found new growth in business world overseas, especially more investor friendly capital markets, such as Australia, Singapore and Hong Kong. Ask any banker or public listed company owner, the obvious power abuse and over stretched current generation of policy watch dog is one of the main cause towards the glut of Bursa Malaysia melt down, if not the main reason, it'll be the only cause.
Disregard what are the excuses and how this generation of rookies policy holders pretend to be smart and abuse their power, at the extend of interfering business decision-centric towards compliance decision-centric business culture, Bursa Malaysia is among the few bottom markets which has less and less listed companies, and finding the culprit is straight forward. To make the situation worst - those who trying to play the role of all mighty directly allowing the top 5% more "resourceful" to suck the 95% weak bottom dry. If the top few are allowed to better packaged their business dealings, while the bottom are being bullied to the extreme unable to grow their business spending less resource towards business while more resources towards compliance - the basic market function is dead end. The watch dogs are lying to themselves - denying that either the top or the bottom are virtually doing the same thing - whatever markets are supposed to self-regulate and given time to perform. The weaker bottom becomes natural easy targets for the sake of thrill of power abuse in the name of justice.
The socialist invisible hand would sooner or later plays its role, if the extremist capitalism by taking from the 95% to serve the 5% elite is to carry on. Extreme happens throughout human history - the falls of empires, mostly evolves from same pattern - authority power over stretched, creates gluts in social order, and unrest shall happen.
How the market will evolve, time will tell. One fact is for sure - if the market environment is not favorable, there is no room for business, eventually all businesses will flee the market. People shall have no chance to survive - re-suffer shall happen. The overall performance of the market will tell the story if the care takers are indeed care takers or abuser, or being used as a tool for abuse by interest party. Regardless how they self perceive, the result of market condition reflects.
Can this generation of new entrepreneur like Larry be able to survive the dying market condition? Market forces shall play its role - given time, fundamental performance shall be the only universal answer. Perhaps the market needs more of such new entrepreneurs coming into the poll, but it may not be in Malaysia if environment persist.
Wall Street, 6 April 2015.
References of Dato Larry Tey Por Yee investments in Malaysia:
http://www.bloomberg.com/research/stocks/people/person.asp?personId=25318471&ticker=NNCB:MK
http://www.theantdaily.com/Business-Targeted/Tey-makes-waves-in-small-cap-companies
http://www.focusmalaysia.my/ArticleDetail.aspx?ArticleId=1251
http://quotes.wsj.com/MY/XKLS/WINTONI/company-people/executive-profile/86370216
http://www.sharesinv.com/zh/my/company/0096/
http://quotes.wsj.com/MY/XKLS/MPCORP/company-people/executive-profile/86370216
http://web6.bernama.com/bernama/v3/bm//news_lite.php?id=1113409
http://www.malaysiapropertynews.com.my/2015/03/nexgram-land-eyes-rm293mil-net-profit-years-.htm
Update 6 April 2015
Larry Tey Por Yee (Larry), a businessman turn venture capitalist, whom global venture named him the sugar daddy to hundreds of darlings, thanks to his reportedly seed funding to few hundreds companies globally. Many of which are start ups, some are even his clients, suppliers and young entrepreneur, whom he met and joint invested with other passionate venture capitalist, a bold risk many Asian entrepreneur would not take, especially to invest in other entrepreneur.
Today, Larry's work is more towards corporate dealing, such as merger & acquisition, restructuring, business advisory and general investments. He is also reportedly devoted him time in social affairs, including consistent contribution to charity, education and human science researches.
One of Larry's investee once told a financial journalist "Those managers who graduated from Larry's training would be a tough entrepreneur and survivor. He is generous and humble to groom new blood with full effort, its some what over stretched yet adventurous. He is like using cookie cutter formula to reproduce entrepreneur. Something Asian market cannot provide".
Larry was called on duty to bring back his investments to the country (Malaysia). In year 2012, he came into Malaysia corporate scene as a white knight to bail a Malaysia businessman out of hostile situation. Ever since, he had invested in few more public listed companies, added more life to the capital market.
Malaysia stock market, now called Bursa Malaysia, is virtually dead, or walking towards it's old age, which is few steps away from the graveyard. With the business tycoons in the 80's and 90's retired from corporate scene, so as the care takers and facilitators in Bursa and capital market, there is virtually not many fresh blood in the market to encourage healthy market growth. The new generation of businessman needs to be facilitated and nurtured towards building wealth and jobs for the country. However, where are the next generation trend setters and game changers? What went wrong?
Started since 90's, talents from Malaysia were either study-and-stayed back overseas, or migrated. Waves of young entrepreneurs were reluctant to come back to the country, and many found new growth in business world overseas, especially more investor friendly capital markets, such as Australia, Singapore and Hong Kong. Ask any banker or public listed company owner, the obvious power abuse and over stretched current generation of policy watch dog is one of the main cause towards the glut of Bursa Malaysia melt down, if not the main reason, it'll be the only cause.
Disregard what are the excuses and how this generation of rookies policy holders pretend to be smart and abuse their power, at the extend of interfering business decision-centric towards compliance decision-centric business culture, Bursa Malaysia is among the few bottom markets which has less and less listed companies, and finding the culprit is straight forward. To make the situation worst - those who trying to play the role of all mighty directly allowing the top 5% more "resourceful" to suck the 95% weak bottom dry. If the top few are allowed to better packaged their business dealings, while the bottom are being bullied to the extreme unable to grow their business spending less resource towards business while more resources towards compliance - the basic market function is dead end. The watch dogs are lying to themselves - denying that either the top or the bottom are virtually doing the same thing - whatever markets are supposed to self-regulate and given time to perform. The weaker bottom becomes natural easy targets for the sake of thrill of power abuse in the name of justice.
The socialist invisible hand would sooner or later plays its role, if the extremist capitalism by taking from the 95% to serve the 5% elite is to carry on. Extreme happens throughout human history - the falls of empires, mostly evolves from same pattern - authority power over stretched, creates gluts in social order, and unrest shall happen.
How the market will evolve, time will tell. One fact is for sure - if the market environment is not favorable, there is no room for business, eventually all businesses will flee the market. People shall have no chance to survive - re-suffer shall happen. The overall performance of the market will tell the story if the care takers are indeed care takers or abuser, or being used as a tool for abuse by interest party. Regardless how they self perceive, the result of market condition reflects.
Can this generation of new entrepreneur like Larry be able to survive the dying market condition? Market forces shall play its role - given time, fundamental performance shall be the only universal answer. Perhaps the market needs more of such new entrepreneurs coming into the poll, but it may not be in Malaysia if environment persist.
Wall Street, 6 April 2015.
References of Dato Larry Tey Por Yee investments in Malaysia:
http://www.bloomberg.com/research/stocks/people/person.asp?personId=25318471&ticker=NNCB:MK
http://www.theantdaily.com/Business-Targeted/Tey-makes-waves-in-small-cap-companies
http://www.focusmalaysia.my/ArticleDetail.aspx?ArticleId=1251
http://quotes.wsj.com/MY/XKLS/WINTONI/company-people/executive-profile/86370216
http://www.sharesinv.com/zh/my/company/0096/
http://quotes.wsj.com/MY/XKLS/MPCORP/company-people/executive-profile/86370216
http://web6.bernama.com/bernama/v3/bm//news_lite.php?id=1113409
http://www.malaysiapropertynews.com.my/2015/03/nexgram-land-eyes-rm293mil-net-profit-years-.htm
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